In the beginning of year 2012, Seven Seas was founded and immediately started to

Question

In the beginning of year 2012, Seven Seas was founded and immediately started to manufacture live vest jacket from its undisclosed location in Hialeah, Florida. The company officials are known by monitoring cash flow budget very closely. Use the following information to answer question 16

Year 2012 ( First Year of operations )

January sales = $120,000
February sales = $160,000
March sales = $140,000
April sales = $120,000
May sales = $110,000
1. Monthly credit sales equal to 75% of sales
2. Refund received during the month of January equal to $7,000
3. Accrued monthly commission expense equal to 14%
4. Credit sales is collected in the following monthly pattern, current month equal to 20%, remaining balance 20%,35%,10%,15%
5. Monthly commission expense increase at a rate of 1.1% (compound)
6. Cash refund received during the month represents 95% of the refund received in previous month
7. 2% of A/R is always write off at the end of the month
8. Commission expense incurred during the month of January equal to $15,000
9. Monthly depreciation expense equal to $8,500


Question 16 (you MUST demonstrate your calculation)

What was the cash ending balance in April? ( ignore cents only in April cash ending balance )

a) 340,540
b) 287,900
c) 260,175
d) 323,070
e) 275,581
f) 384,849
g) 230,426
h) None of the above

Explanation / Answer

h) None of the above

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