ANSWER IS B 20,640 Clinton Company sells air purifiers to customers for $150 per...
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ANSWER IS B 20,640
Clinton Company sells air purifiers to customers for $150 per unit. An overseas company supplies the purifiers for $80 per unit. All sales are for cash and the company pays the supplier immediately. The company has budgeted the following data for the first quarter: January February March Sales (in units) 2,000 2,500 2,100 Cash, beginning balance $42,000 ? ? Selling and administrative (of which depreciation, $8,000) $205,000 $205,000 $205,000 Required minimum cash balance $20,000 $20,000 $20,000 3 If necessary, the company will borrow cash from a bank through their credit-line arrangement on the first day of each month. Assume that they can borrow in increment of $1,000. The bank requires an interest payment at the end of each month at a monthly rate of 1%, starting from the first month when the company borrows cash. What is the closest amount of cash balance on February 1? A. $ 30,959 SALES B. $ 20,640 C. $ 30,920 D. $ 30,340 E. None of the above
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ANSWER IS B 20,640