Use the following to answer questions 41-43:

The Grainger Company's budgeted income statement reflects the following amounts:

	Sales		Purchases		Expenses
January	$120,000		$78,000		$24,000
February	110,000		66,000		24,200
March	125,000		81,250		27,000
April	130,000		84,500		28,600

Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year.

Grainger pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1:

Cash	$88,000
Accounts receivable*	58,000
Accounts payable	72,000

*Of this balance, $35,000 will be collected in January and the remaining amount will be collected in February.

The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred.

41. Grainger's expected cash balance at the end of January is:

A. $87,000.

B. $89,160.

C. $92,000.

D. $94,160.

E. $113,160.

Answer: D

42. Grainger's budgeted cash receipts in February are:

A. $91,000.

B. $95,000.

C. $113,090.

D. $113,640.

E. $114,000.

Answer: E

43. Grainger's budgeted cash payments in February are:

A. $75,660.

B. $94,860.

C. $97,200.

D. $99,860.

E. $102,200.

Answer: B

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