The Following Information Pertains to Monroe Company

question 72

Multiple Choice

The following information pertains to Monroe Company:

-Cash is collected from customers in the following manner:
Month of sale35%
Month following the sale65%
-40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
-Labor costs are 30% of sales. Other operating costs are $38,000 per month (including $8,000 of depreciation) . Both of these are paid in the month incurred.
-The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be paid to suppliers in March?

• A) $46,400
• B) $56,000
• C) $96,000
• D) $102,400

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Definitions:

Negligent Misrepresentation

A false statement made carelessly that induces another party to enter into a contract, resulting in harm or loss.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly designed to induce another party to enter into a contract.

Scienter

Knowledge of wrongdoing or fraudulent intent, often required to be proven in cases of securities fraud.

Unilateral Mistake

A situation in contract law where only one party is mistaken about a basic assumption on which the contract is based.