DDC, Inc. has projected its first quarter sales at $9,200, secondquarter sales a
ID: 2662464 • Letter: D
Question
DDC, Inc. has projected its first quarter sales at $9,200, secondquarter sales at $9,800, and third quarter sales at $9,400. Thefirm's cost of goods sold is equal to 62 percent of the nextquarter's sales. The accounts receivable period is 45 days and theaccounts payable period is 60 days. At the beginning of the firstquarter, the firm has an accounts receivable balance of $3,200 andan accounts payable balance of $5,700. The firm pays $1,400 a monthin cash expenses and $150 a month in taxes. At the beginning of thefirst quarter, the cash balance is $620 and the short-term loanbalance is zero. During the first quarter, the firm is planning onspending $1,700 for some new equipment. The firm maintains aminimum cash balance of $25. Assume each month has 30 days. The netcash flow for the first quarter is _____ and the cumulative cashsurplus (deficit) at the end of the first quarter, prior to anyshort-term borrowing, is _____.a. $2,025 ; $2,420 b. $3,175 ; $2,580 c. $1,775 ; $1,180 d. $2,025 ; $1,180 e. $3,175 ; $20,25 Can someone please help with this problem??? Thanks!
a. $2,025 ; $2,420 b. $3,175 ; $2,580 c. $1,775 ; $1,180 d. $2,025 ; $1,180 e. $3,175 ; $20,25 Can someone please help with this problem??? Thanks!
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