Here Are Some Important Figures from the Budget of Nashville

question 90

Multiple Choice

Here are some important figures from the budget of Nashville Nougats, Inc., for the second quarter of 2012: The company predicts that 3 percent of its credit sales will never be collected, 36 percent of its sales will be collected in the month of sale, and the remaining 61 percent will be collected in the following month. Credit purchases will be paid in the month following the purchase.
In March 2012, credit sales were $302,400, and credit purchases were $224,640. The April 1 cash balance was $403,200. What is the cash balance at the end of May?

• A)$348,887
• B)$366,846
• C)$414,141
• D)$457,777
• E)$477,374

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of the shareholders.

Sales

The total amount of goods or services sold by a company within a specific period, generating revenue.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific business segment, department, or product and would disappear if the segment was eliminated.

Variable Expenses

Costs that change in proportion to business activity or production volume, such as materials costs, direct labor, and utilities for machinery.