Author Question: The following information pertains to Monroe Company: ... (Read 20 times)

rachel9 · **on:** Mar 6, 2021

The following information pertains to Monroe Company:

Month

Sales

Purchases

January

$62,000

$33,000

February

$84,000

$42,000

March

$101,000

$61,000

∙ Cash is collected from customers in the following manner:

Month of sale

40%

Month following the sale

60%

∙ 45% 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 $38,000 per month (including $10,000 of depreciation). Both of these are paid in the month incurred.
∙ The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

How much cash will be disbursed in total in March?
◦ $58,300
◦ $68,300
◦ $108,850
◦ $118,850

bulacsom · **Reply #1 on:** Mar 6, 2021

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