Nformation on the Actual Sales and Inventory Purchases of the Law

question 108

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 balance on April 30?

• A) $19,700.
• B) $28,700.
• C) $54,700.
• D) $62,700.

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Definitions:

Labor Shortage

A situation where employers have difficulty filling open positions due to a scarcity of qualified candidates, often affecting certain industries or skill sets.

Temporary Employees

Workers hired on a non-permanent basis to fill short-term needs of the employing organization.

Forecasting Labor Shortage

The process of predicting future shortages in the workforce based on current trends, demographic changes, and economic factors.

Forecasting Labor Surplus

The process of predicting periods during which the number of employees exceeds the number needed by the organization.