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Use the following to answer questions 21-24:...

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Use the following to answer questions 21-24: Information on the actual sales and inventory purchases of the Law Company for the first quarter follow: Inventory Sales Purchases January $120,000 $60,000 February $100,000 $78,000 March $130,000 $90,000 Collections from Law Company's customers are normally 60% in the month of sale, 30% in the month following sale, and 8% in the second month following sale. The balance is uncollectible. Law Company takes full advantage of the 3% discount allowed on purchases paid for by the end of the following month. The company expects sales in April of $150,000 and inventory purchases of $100,000. Operating expenses for the month of April are expected to be $38,000, of which $15,000 is salaries and $8,000 is depreciation. The remaining operating expenses are variable with respect to the amount of sales in dollars. Those operating expenses requiring a cash outlay are paid for during the month incurred. Law Company's cash balance on March 1 was $43,000, and on April 1 was $35,000. The expected cash collections from customers during April would be: a. $150,000. b. $137,000. c. $139,000. d. $117,600. Save Answer 22. (Points: 1) The expected cash disbursements during April for inventory purchases would be: a. $100,000. b. $97,000. c. $90,000. d. $87,300. Save Answer 23. (Points: 1) The expected cash disbursements during April for operating expenses would be: a. $38,000. b. $30,000. c. $23,000. d. $15,000. Save Answer 24. (Points: 1) The expected cash balance on April 30 would be: a. $54,700. b. $62,700. c. $19,700. d. $28,700.

 

Paper#11032 | Written in 18-Jul-2015

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