Author Question: The following information pertains to Monroe Company: ... (Read 16 times)

colton · **on:** Mar 6, 2021

The following information pertains to Monroe Company:

Month

Sales

Purchases

January

$68,000

$35,000

February

$87,000

$46,000

March

$106,000

$58,000

∙ Cash is collected from customers in the following manner:

Month of sale

30%

Month following the sale

70%

∙ 45% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
∙ Labor costs are 20% of sales. Other operating costs are $32,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred.
∙ The cash balance on March 1 is $8,900. A minimum cash balance of $6,000 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?
◦ $8,900
◦ $5,200
◦ $5,000
◦ $6,000

14vl19 · **Reply #1 on:** Mar 6, 2021

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