The Following Information Pertains to Monroe Company

question 214

Multiple Choice

The following information pertains to Monroe Company:

-Cash is collected from customers in the following manner:
Month of sale30%
Month following the sale70%-45% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
-Labor costs are 20% of sales. Other operating costs are $32,000 per month (including $8,000 of depreciation) . Both of these are paid in the month incurred.
-The cash balance on March 1 is $8,900. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
What is the ending cash balance for March?

• A) $8,900
• B) $5,200
• C) $5,000
• D) $6,000

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Definitions:

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