The treasurer of Simmons Corporation, a newly formed software company is trying
ID: 341381 • Letter: T
Question
The treasurer of Simmons Corporation, a newly formed software company is trying to ascertain Simmons cash flows for the next three months. Expected sales are: January February March Expected Sales $200 $220 $300 50% of sales are made for cash. Simmons expects to receive 25% in the month following the sale and 20% in the second month following the sale. The remaining 5% are expected to be un-collectible. Gross margin is 20%, and purchases are made one month prior to sale. Purchases are paid one month after received. The cash inflows in March from sales will be:
$250
$245
$220
None of the above.
Explanation / Answer
Ans: b $245
March Sales 300*50% 150 Feb sales 220*25% 55 January sales 200*20% 40 Cash Inflows in march 245.0Related Questions
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