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In: Accounting

Bent Company, a retail organization, has just begun operations. Expected sales for the next three months...

Bent Company, a retail organization, has just begun operations. Expected sales for the next three months are 2000, 2500, and 3000 units. Bent Company purchases for $50 per unit the sole product it sells, and sells that product for $80 per unit. Bent Company makes all sales on credit and collects 40% of each month’s sales in the month of sale and 60% in the following month. Planned purchases in the next three month’s are 3200, 2700, and 2900 units. Bent Company pays 30% of its purchases in the month of purchase and 70% in the following month. Fixed costs are $30,000 per month and are all cash expenses. Which of the following is the net cash flow in month 3?

a. $12,150.

b. $48,000.

c. $71,850.

d. None of the above

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Expert Solution

ekkarill92 answered 2 years ago
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