QUESTION 27 The following information pertains to Hepburn Company: Month Sales Purchases January February $63,000 $82,000 $102,000 $39,000 $44,000 $57,000 March Cash is collected from customers in the following manner: Month of sale 35% Month following the sale 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the 65% Following month. Labor costs are 30% of sales. Other operating costs are $32,000 per month (including $9000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1is $15 800 A minimum cash balane of $3000 is reguired at the end
QUESTION 27 The following information pertains to Hepburn Company: Month Sales Purchases January February $63,000 $82,000 $102,000 $39,000 $44,000 $57,000 March Cash is collected from customers in the following manner: Month of sale 35% Month following the sale 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the 65% Following month. Labor costs are 30% of sales. Other operating costs are $32,000 per month (including $9000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1is $15 800 A minimum cash balane of $3000 is reguired at the end
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:QUESTION 27
The following information pertains to Hepburn Company:
Month
Sales
Purchases
January
February
March
$63,000
$82,000
$102,000
$39,000
$44,000
$57,000
Cash is collected from customers in the following manner:
Month of sale
35%
65%
Month following the sale
40% of purchases are paid for in cash in the month of purchase, and the balance is paid the
following month.
Labor costs are 30% of sales. Other operating costs are $32,000 per month (including $9000 of
depreciation). Both of these are paid in the month incurred.
The cash balance on March 1 is $15,800. A minimum cash balance of $3000 is required at the end
of the month. Money can be borrowed in multiples of $1,000.
What is the ending cash balance for March?
$15,800
$2000
$9800
$3000
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