4. (TCO G) The ABC Corporation\'s budgeted monthly sales are $4,000. In the firs

Question

4. (TCO G) The ABC Corporation's budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount. The remaining 60% pay in the month following the sale and don't receive a discount. ABC's bad debts are very small and are excluded from this analysis. Purchases for next month's sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month. Construct a single month's cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation? (Points : 20)

Explanation / Answer

Revenue collected each month = 40%*$4,000*.97 + 60%*$4,000 = $3952 Expenses = $2,000 + $500 = $2,500 Cash gain = $3952-$2,500 = $1452

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.