Question

The following information pertains to Hepburn Company.

Month	Sales	Purchases
January	$40000	$22000
February	$36000	$20200
March	$39600	$22600

• Cash is collected from customers 20percent in the month of the sale and 80in the month immediately following the sale.
• 55percent of purchases are paid for in cash in the month of the purchase, and the balance is paid the following month.
• Labor costs are 16percent of sales. Other operating costs are $35000per month, including $4000of depreciation. These costs are paid in the month incurred.
• The cash balance on March 1st is $10000.
• A minimum cash balance of $10000 is required at the end of the month.
• Money can be borrowed in multiples of $500.

How much cash will be paid in total during March? Do not use any dollar signs or commas in your answer.

Answer 1

The following information pertains to Hepburn Company.

Month	Sales	Purchases
January	$40000	$22000
February	$36000	$20200
March	$39600	$22600

• Cash is collected from customers 20percent in the month of the sale and 80in the month immediately following the sale.
• 55percent of purchases are paid for in cash in the month of the purchase, and the balance is paid the following month.
• Labor costs are 16percent of sales. Other operating costs are $35000per month, including $4000of depreciation. These costs are paid in the month incurred.
• The cash balance on March 1st is $10000.
• A minimum cash balance of $10000 is required at the end of the month.
• Money can be borrowed in multiples of $500.

How much cash will be paid in total during March? Do not use any dollar signs or commas in your answer.

Explanation in workings:

 

the amount of cash to be paid in total during the month of March will be =$58,856