The following information pertains to Dresden Company: Month Sales Purchases January $100,000 $26,000 February $80,000 $30,000...

 

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The following information pertains to Dresden Company: Month Sales Purchases January $100,000 $26,000 February $80,000 $30,000 March $50,000 $48,000 The company's sales are 40% cash and 60% on credit. Credit sales are collected as follows: -30% collected in month of sale; 60% in the month after the sale -10% two months after the sale All purchases other than labour and operating costs are paid in cash in the month incurred.. Labour costs are 50% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these, labour and operating costs, are paid in the month incurred. There are no other cash payments. The cash balance on March 1 is $6,000. A minimum cash balance of $10,000 is required at the end of the month. Money can be borrowed in multiples of $100. Required: 1. What is the total cash collection in March? 2. What is the total cash payment in March? 3. How much will Dresden need to borrow in March? The following information pertains to Dresden Company: Month Sales Purchases January $100,000 $26,000 February $80,000 $30,000 March $50,000 $48,000 The company's sales are 40% cash and 60% on credit. Credit sales are collected as follows: -30% collected in month of sale; 60% in the month after the sale -10% two months after the sale All purchases other than labour and operating costs are paid in cash in the month incurred.. Labour costs are 50% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these, labour and operating costs, are paid in the month incurred. There are no other cash payments. The cash balance on March 1 is $6,000. A minimum cash balance of $10,000 is required at the end of the month. Money can be borrowed in multiples of $100. Required: 1. What is the total cash collection in March? 2. What is the total cash payment in March? 3. How much will Dresden need to borrow in March?

Answer rating: 100% (QA)

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