Avengers Inc. began operations on January 1 of the current year with a $25,000 cashbalance. 40% of sales are collected in the month of sale; 60% are collected in the monthfollowing sale. Similarly, 45% of purchases are paid in the month of purchase, and 55% are paid in the month following purchase. The following data apply to January - Sales$75000, purchases $60000 and operating expenses - $9000 and February Sales S80000, purchases $65000 and operating expenses - $18000. If operating expenses arepaid in the month incurred and include monthly depreciation charges of $5000, determine the change in Avenger's cash balance during January and February monthseparately and the cash balance at the end of January and February.

Avengers Inc. began operations on January 1 of the current year with a $25,000 cashbalance. 40% of sales are collected in the month of sale; 60% are collected in the monthfollowing sale. Similarly, 45% of purchases are paid in the month of purchase, and 55% are paid in the month following purchase. The following data apply to January - Sales$75000, purchases $60000 and operating expenses - $9000 and February Sales S80000, purchases $65000 and operating expenses - $18000. If operating expenses arepaid in the month incurred and include monthly depreciation charges of $5000, determine the change in Avenger's cash balance during January and February monthseparately and the cash balance at the end of January and February.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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