Use the following to answer questions 56-58.

56. The sales of PDC Company in March were $92,000. The Balance sheet of PDC Company (31 March) is given below.

Current Assets:
Cash	23,000
Accounts receivable	36,800
Merchandise inventory	110,400
Unexpired insurance	4,140
Total Current Assets	174,340
Plant
Equipment, fixtures and other	85,100
Accumulated depreciation	-29,440
Net PPE	55,660
Total Assets	230,000
Current Liabilities
Accounts payable	38,640
Accrued wages and commissions payable	9,775
Loan	0
Total Current Liabilities	48,415
Owner's equity	181,585
Total equities	230,000

The projected sales in April and May are $115,000 and $184,000 respectively.

PDC sales are 60% cash and 40% credit, collected in the following month. It has no currently overdue accounts and anticipates none in the future.

The company bought a second hand truck on 1 April 2008: $6,900

Miscellaneous cash expenses: 5% of the current sales

Rent: $4,600/month

Insurance expense: paid once a year (beginning of January) = $5,520;

Depreciation expense: $1,150/month (including for the truck)

Tax rate: 0%

Wages: $5750/month + 15% commission of sales/month

Wages are paid twice a month and paid a half month after they are earned.

The inventory policy of the company is to begin a month with a sufficient inventory to cover 80% of sales + $46,000 cushion

Cost of Goods Sold: 70% of sales

Purchases are made on account with net 15-day credit terms (50% of the purchases made in a specific month are paid in that month, the other 50% of a months purchases are paid the following month).

PDC borrowed from one of its founder at 1.5% interest/month for the next 2 years. PDC borrows from and repays the founder at the end of the month. The agreement with this founder stipulates a $23,000 minimum cash balance in the ventures checking account.

The ending inventory in April is

(a) $123,280

(b) $149,040

(c) $110,400

(d) $193,200

(e) $138,000

57. Accounts payable in April is

(a) $38,640.

(b) $41,860.

(c) $59,570.

(d) $51,520.

(e) None of the above.

58. Total purchases of raw materials in April is

(a)$77,280

(b)$103,040

$67,620

(d)$83,720

None of the above

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