Oladipo Merchandising Company expects its July sales to be 15% lower than its June sales of...

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Oladipo Merchandising Company expects its July sales to be 15% lower than its June sales of $200,000. The cost of goods sold is 70% of sales and the company wants to purchase just enough inventory to meet expected sales needs for each month with no ending inventories. 80% of sales are on credit while the remainder is in cash. Sales on credit are collected as follows: 65% in the month of the sale and 32% in the following month. Purchases are paid 60% in the month of purchase and 40% in the following month. The cash balance on July 1 is $15,000. The cash balance on July 31 will be: $50,500 O $61,200 $68,700 O $74,000 Oladipo Merchandising Company expects its July sales to be 15% lower than its June sales of $200,000. The cost of goods sold is 70% of sales and the company wants to purchase just enough inventory to meet expected sales needs for each month with no ending inventories. 80% of sales are on credit while the remainder is in cash. Sales on credit are collected as follows: 65% in the month of the sale and 32% in the following month. Purchases are paid 60% in the month of purchase and 40% in the following month. The cash balance on July 1 is $15,000. The cash balance on July 31 will be: $50,500 O $61,200 $68,700 O $74,000

Answer rating: 100% (QA)

Option C 61200 Working Notes June July Sales 200000 170000 Cost Of Goods Sold 70 of Sales ... View the full answer