tableABCDEFGHd Each month's ending inventory should equal:,,,,,
This is a merchandising business. Because of this, there is no direct materials, direct labor or MOH we are not making units
e of a month's inv purchases are paid in the month of purch. are paid in the following month.
f Monthly expenses are as follows paid monthly:
tableCommissionsRentOther expenses excluding depr of salesDepreciation per month:,includes new assets purchased this quarter
g Equipment will be acquired for cash:
tabletableMayJuneh A dividend will be paid in April,
i Manny would like to maintain a minimum cash balance of $ at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $ at the beginning of each month, up to a total loan balance of $ The interest rate on these loans is annually, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. A borrowing in the last month will be repaid the following quarter with interest.
