Nformation on the Actual Sales and Inventory Purchases of the Law

question 32

Multiple Choice

nformation on the actual sales and inventory purchases of the Law Company for the first quarter follow:
$\begin{array} { | l | r | r | } \hline & \text { Inventory Sales } & \text { Purchases } \\\hline \text { January } & \$ 120,000 & \$ 60,000 \\\hline \text { February } & 100,000 & 78,000 \\\hline \text { March } & 130,000 & 90,000 \\\hline\end{array}$
Collections from Law Company's customers are normally 60% in the month of sale, 30% in the month following sale, and 8% in the second month following sale. The balance is uncollectible. Law Company takes full advantage of the 3% discount allowed on purchases paid for by the end of the following month.

The company expects sales in April of $150,000 and inventory purchases of $100,000. Operating expenses for the month of April are expected to be $38,000, of which $15,000 is salaries and $8,000 is depreciation. The remaining operating expenses are variable with respect to the amount of sales in dollars. Those operating expenses requiring a cash outlay are paid for during the month incurred. Law Company's cash balance on March 1 was $43,000, and on April 1 was $35,000.



-What would be the expected cash disbursements during April for operating expenses?

• A) $15,000.
• B) $23,000.
• C) $30,000.
• D) $38,000.

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Definitions:

Locomotion

The ability of an organism to move from one place to another using its own power.

Many-Chambered Tests

Structures found in certain microorganisms, like foraminifera, consisting of multiple connected chambers used for buoyancy and other functions.

Forams

Forams, short for foraminifera, are a large group of amoeboid protists with reticulating pseudopods, known for their complex shell structures, significant in the fossil record and marine ecosystems.

Cytoplasmic Projections

Extensions of the cell's cytoplasm that increase surface area or aid in cellular movement, such as pseudopods in amoebas.