This Question: 1 pt 14 of 18 (1 ·.mplete) ? | This Quiz: 18 pts possibl Romona C

Question

This Question: 1 pt 14 of 18 (1 ·.mplete) ? | This Quiz: 18 pts possibl Romona Company expects its November sales to be 20% higher than its October sales of $150 000 All sales are on credit and are collected as follows 20% in the month of the sale and 75% in the following month Purchases were S60 000 in October and are expected to be $160,000 in November Purchases are paid 35% in the month of purchase and 65% in the following month The cash balance on November 1 is S 13,900 The cash balance on November 30 will be O A. $53,500 O B. S67.400 C. $39,600 ? D. $162.400

Explanation / Answer

B. $67,400

November sales = ($150,000 * 120%) = $180,000

Collection in november = ($180,000 * 20%) + ($150,000 * 75%) = $148,500

Payments made = ($60,000 * 65%) + ($160,000 * 35%) = $95,000

Hence cash balance = $13,900 + $148,500 - $95,000 = $67,400

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