The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000...

80.2K

Verified Solution

Question

Accounting

The following information pertains to Hepburn Company:

Month Sales Purchases

January $60,000 $32,000

February $80,000 $40,000

March $100,000 $56,000

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 $30,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred.

The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

What is the ending cash balance for March?

A) $8,000

B) $6,000

C) $5,600

D) $6,600

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member