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  3. morgan company's budgeted income statement reflect

Morgan Company's budgeted income statement reflects the following amounts: ...

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Accounting

Morgan Company's budgeted income statement reflects the following amounts:

Sales Purchases Expenses
January $ 120,000 $ 79,900 $ 24,500
February 110,000 67,900 24,700
March 125,000 83,150 27,500
April 130,000 86,400 29,100

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. Morgan 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 $ 88,000
Accounts receivable* 58,000
Accounts payable 72,000

*Of this balance, $25,000 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred. Morgans budgeted cash payments in February are:

Multiple Choice

  • $78,003.

  • $97,203.

  • $99,743.

  • $102,203.

  • $104,743.

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