Ned's Co Has an Average Collection Period of 45 Days and and an Operating

question 45

Multiple Choice

Ned's Co. has an average collection period of 45 days and an operating cycle of 130 days. It has a policy of keeping at least $10 on hand as a minimum cash balance, and has a beginning cash
Balance for the first quarter of $20. Beginning receivables for the quarter amount to $35. Sales for
The first and second quarters are expected to be $110 and $125, respectively, while purchases
Amount to 80% of the next quarter's forecast sales. The accounts payable period is 90 days.
What is the ending cash balance for the first quarter?

• A) $12
• B) $20
• C) $22
• D) $28
• E) $32

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Definitions:

Listening Skills

The ability to actively understand information provided by the speaker, showing attention and processing the message effectively.

Attentive Listening

The active, focused process of hearing, understanding, and responding to spoken messages.

Quiet Voice

A soft or subdued tone of voice that may reflect calmness, uncertainty, or a desire not to attract attention.

Western Industrialized Countries

Nations primarily located in the Western Hemisphere that are characterized by high levels of industrialization, advanced technological infrastructure, and higher standards of living.