Plato Industries' projected sales for the first six months of 2012 are given below: Jan. $250,000 April $300,000 Feb. $340,000 May $350,000 Mar. $280,000 June $380,000 20% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 30% are collected in the second month following the sale. Cost of goods sold is 85% of sales. Purchases are made in the month prior to the sales, and payments for purchases are made in the month of the sale. Total other cash expenses are $70,000/month. The company's cash balance as of February 28, 2012 will be $10,000. Excess cash will be used to retire short-term borrowing (if any). Plato has no short term borrowing as of February 28, 2012. Ignore any interest on short-term borrowing. The company must have a minimum cash balance of $40,000 at the beginning of each month. What is Plato Industries' total disbursement in May? A. $425,500 B. $367,500 C. $348,000 D. $324,000
Plato Industries' projected sales for the first six months of 2012 are given below: Jan. $250,000 April $300,000 Feb. $340,000 May $350,000 Mar. $280,000 June $380,000 20% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 30% are collected in the second month following the sale. Cost of goods sold is 85% of sales. Purchases are made in the month prior to the sales, and payments for purchases are made in the month of the sale. Total other cash expenses are $70,000/month. The company's cash balance as of February 28, 2012 will be $10,000. Excess cash will be used to retire short-term borrowing (if any). Plato has no short term borrowing as of February 28, 2012. Ignore any interest on short-term borrowing. The company must have a minimum cash balance of $40,000 at the beginning of each month. What is Plato Industries' total disbursement in May? A. $425,500 B. $367,500 C. $348,000 D. $324,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Give only typing answer with explanation and conclusion
![Plato Industries' projected sales for the first six months of 2012 are given below:
Jan.
$250,000 April
$300,000
Feb.
$340,000
May
$350,000
Mar.
$280,000 June
$380,000
20% of sales are collected in cash at time of sale, 50% are collected in the month following the sale,
and the remaining 30% are collected in the second month following the sale. Cost of goods sold
is 85% of sales. Purchases are made in the month prior to the sales, and payments for purchases are
made in the month of the sale. Total other cash expenses are $70,000/month. The company's cash
balance as of February 28, 2012 will be $10,000. Excess cash will be used to retire short-term
borrowing (if any). Plato has no short term borrowing as of February 28, 2012. Ignore any interest on
short-term borrowing. The company must have a minimum cash balance of $40,000 at the beginning
of each month. What is Plato Industries' total disbursement in May?
A.
$425,500
B. $367,500
C. $348,000
D. $324,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53bbedac-6be3-4e7e-86f9-c986f9db2c85%2F0dc4af5f-cb28-4b3b-af98-eab9574ff007%2F37youo_processed.png&w=3840&q=75)
Transcribed Image Text:Plato Industries' projected sales for the first six months of 2012 are given below:
Jan.
$250,000 April
$300,000
Feb.
$340,000
May
$350,000
Mar.
$280,000 June
$380,000
20% of sales are collected in cash at time of sale, 50% are collected in the month following the sale,
and the remaining 30% are collected in the second month following the sale. Cost of goods sold
is 85% of sales. Purchases are made in the month prior to the sales, and payments for purchases are
made in the month of the sale. Total other cash expenses are $70,000/month. The company's cash
balance as of February 28, 2012 will be $10,000. Excess cash will be used to retire short-term
borrowing (if any). Plato has no short term borrowing as of February 28, 2012. Ignore any interest on
short-term borrowing. The company must have a minimum cash balance of $40,000 at the beginning
of each month. What is Plato Industries' total disbursement in May?
A.
$425,500
B. $367,500
C. $348,000
D. $324,000
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