BusyBody Company expects its November sales to be 20% higher than its October sales of $180,000.Purchases were $110,000 in October and are expected to be $160,000 in November.All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month.Purchases are paid 40% in the month of purchase and 60% in the following month.The cash balance on November 1 is $13,500.The cash balance on November 30 will be

Question

Quizplus · Accepted Answer

C)
Oct.Sales $180,000 × 60% = 108,000
Nov.Sales 180,000 × 1.2% = 216,000 × 35% = 75,600
Total Cash Receipts 183,600
Oct.Purchases $110,000 × 60% = 66,000
Nov.Purchases 160,000 × 40% = 64,000
Total Cash Disbursements $130,000
Beginning Cash $13,500
Cash Receipts + 183,600
Cash Disbursements - 130,000
Ending Cash $67,100

BusyBody Company Expects Its November Sales to Be 20% Higher