Month April May June Purchases $18,000 $25,000 $32,000 Cash is collected from customers in the following manner: Month of sale 25% Month following the sale 70% -Uncollectible 5% 20% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Labor costs are 35% of sales. Other operating costs are $16,000 per month (including $4,000 of depreciation). Both of these are paid in the month incu $6,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. How much cash will be paid out to suppliers in June? O $20,200 $42,000 $22,600 $26,400 Sales $45,000 $50,000 $55,000
Month April May June Purchases $18,000 $25,000 $32,000 Cash is collected from customers in the following manner: Month of sale 25% Month following the sale 70% -Uncollectible 5% 20% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Labor costs are 35% of sales. Other operating costs are $16,000 per month (including $4,000 of depreciation). Both of these are paid in the month incu $6,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. How much cash will be paid out to suppliers in June? O $20,200 $42,000 $22,600 $26,400 Sales $45,000 $50,000 $55,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Month
April
May
June
Purchases
$18,000
$25,000
$32,000
Cash is collected from customers in the following manner:
Month of sale 25%
Month following the sale 70%
-Uncollectible 5%
20% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
Labor costs are 35% of sales. Other operating costs are $16,000 per month (including $4,000 of depreciation). Both of these are paid in the month incu
$6,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be paid out to suppliers in June?
O $20,200
$42,000
$22,600
$26,400
Sales
$45,000
$50,000
$55,000
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