(36) It is November 1 of Year 1. Sales for a computer company for November, D December, and January (of Year 2) are forecasted to be as follows: November: $400,000 December: $1,000,000 • January: $200,000 On average, the cost of goods sold is 50% of sales. During this period, the company expects inventory levels to remain constant. This means that inventory purchases are expected to equal the amount of cost of goods sold. 100% of purchases are on credit. Of the credit purchases, 5% are paid during the month of the purchase, 65% in the month following the purchase, and 30% in the second month following the purchase. Sales for September and October of Year 1 were $400,000 and $500,000, respectively. What is the forecasted amount of total cash payments for purchases in January? $230,000 $330,000 O $385,000 O $390,000

(36) It is November 1 of Year 1. Sales for a computer company for November, D December, and January (of Year 2) are forecasted to be as follows: November: $400,000 December: $1,000,000 • January: $200,000 On average, the cost of goods sold is 50% of sales. During this period, the company expects inventory levels to remain constant. This means that inventory purchases are expected to equal the amount of cost of goods sold. 100% of purchases are on credit. Of the credit purchases, 5% are paid during the month of the purchase, 65% in the month following the purchase, and 30% in the second month following the purchase. Sales for September and October of Year 1 were $400,000 and $500,000, respectively. What is the forecasted amount of total cash payments for purchases in January? $230,000 $330,000 O $385,000 O $390,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 1P

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