Author Question: The following information pertains to Monroe Company: ... (Read 79 times)

Jipu 123 · **on:** Mar 6, 2021

The following information pertains to Monroe Company:

Month

Sales

Purchases

January

$67,000

$32,000

February

$88,000

$45,000

March

$100,000

$58,000

∙ Cash is collected from customers in the following manner:

Month of sale

30%

Month following the sale

70%

∙ 40% 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 $37,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred.
∙ The cash balance on March 1 is $10,000. 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 collected from customers in March?
◦ $96,400
◦ $91,600
◦ $100,000
◦ $118,000

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

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