Morgan Company's budgeted income statement reflects the following amounts:

	Sales			Purchases			Expenses
January	$	120,000		$	79,900		$	24,500
February		110,000			67,900			24,700
March		125,000			83,150			27,500
April		130,000			86,400			29,100

Sales are collected 50% in the month of sale, 30% in the month following sale, and 19% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year.

Morgan pays for all purchases in the month following purchase and takes advantage of a 3% discount. The following balances are as of January 1:

Cash	$	88,000
Accounts receivable*		58,000
Accounts payable		72,000

*Of this balance, $25,000 will be collected in January and the remaining amount will be collected in February.

The monthly expense figures include $5,000 of depreciation. The expenses are paid in the month incurred.

Morgan’s budgeted cash payments in February are:

Multiple Choice

1. $78,003.

2. $97,203.

3. $99,743.

4. $102,203.

5. $104,743.

Answer rating: 100% (QA)

97203 is Correct answer Detail Workign for your ea... View the full answer