The Alpha CD Company's budgeted income statement reflects the following amounts: Sales P120,000 110,000 125,000 130,000 Expenses P24,000 24,200 27,000 28,600 Purchases P78,000 January February March April 66,000 81,250 84,50( Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Alpha CD pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1: Cash Accounts receivable* Accounts payable P88,000 58,000 72,000 *Of this balance, P35,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include P5,000 of depreciation. The expenses are paid in the month incurred.
The Alpha CD Company's budgeted income statement reflects the following amounts: Sales P120,000 110,000 125,000 130,000 Expenses P24,000 24,200 27,000 28,600 Purchases P78,000 January February March April 66,000 81,250 84,50( Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year. Alpha CD pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1: Cash Accounts receivable* Accounts payable P88,000 58,000 72,000 *Of this balance, P35,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include P5,000 of depreciation. The expenses are paid in the month incurred.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Alpha CD's expected cash balance at the end of January is:
- P87,000.
- P89,160.
- P92,000.
- P94,160.
- P113,160.
Transcribed Image Text:The Alpha CD Company's budgeted income statement reflects the following amounts:
Sales
P120,000
110,000
125,000
130,000
Purchases
P78,000
66,000
81,25
84,500
Expenses
P24,000
24,200
27,000
28,600
January
February
March
April
Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the
second month following sale. One percent of sales is uncollectible and expensed at the end of
the year.
Alpha CD pays for all purchases in the month following purchase and takes advantage of a 3%
discount. The following balances are as of January 1:
Cash
Accounts receivable*
Accounts payable
P88,000
58,000
72,000
*Of this balance, P35,000 will be collected in January and the remaining amount will be
collected in February.
The monthly expense figures include P5,000 of depreciation. The expenses are paid in the
month incurred.
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