1. The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000 February $80,000...

 

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1. The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000 February $80,000 $40,000 March $100,000 $56,000 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. Labour costs are 20% of sales. Other operating costs are $30,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. a. How much cash will be collected from customers in March? (5%) b. How much cash will be paid to suppliers in March? (5%) C. How much cash will be disbursed in total in March? (5%) d. What is the ending cash balance for March after borrowing, if required? (5%) e. What are two advantages of budgets (5%) 1. The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000 February $80,000 $40,000 March $100,000 $56,000 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. Labour costs are 20% of sales. Other operating costs are $30,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. a. How much cash will be collected from customers in March? (5%) b. How much cash will be paid to suppliers in March? (5%) C. How much cash will be disbursed in total in March? (5%) d. What is the ending cash balance for March after borrowing, if required? (5%) e. What are two advantages of budgets (5%)

Answer rating: 100% (QA)

a To calculate the cash collected from customers in March we need to consider sales made in January and February as well as their respective collectio... View the full answer