The following information for the second quarter of 2020 pertains to Washburn Company: ...
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Accounting
The following information for the second quarter of 2020 pertains to Washburn Company:
Month
Sales
Purchases
April
$90,000
$48,000
May
$120,000
$60,000
June
$150,000
$84,000
Cash is collected from customers in the following manner:
Month of sale
30%
Month following the sale
70%
40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
Labor costs are 20% of sales. Other operating costs are $45,000 per month (including $12,000 of depreciation). Both of these are paid in the month incurred.
The cash balance on June 1 is $6,000. A minimum cash balance of $4,500 is required at the end of the month. Money can be borrowed in multiples of $3,000.
No loans outstanding on June 1.
a)How much cash will be collected from customers in June?
$150,000
None of the above is correct.
$129,000
$141,000
b)How much cash will be paid to suppliers in June?
None of the above is correct.
$56,000
$88,000
$69,600
c)How much cash will be disbursed for labor and operating costs in June?
$70,000
$88,400
$96,400
$63,000
d)What is the ending cash balance for June?
$5,400
($50,000)
$6,000
$11,400
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