Problem based on ending cash balance


A company expects its September sales to be 15% higher than its August sales of $140,000. Purchases were $75,000 in August and are expected to be $85,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. The beginning cash balance on September 1 is $71,500. The ending cash balance on September 30 would be:

a) $135,300

b) $121,800

c) $143,700

d) $140,300

e) $148,700

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Accounting Basics: Problem based on ending cash balance
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