Vela Enterprises Inc $\$ 3000$
?March Sales, All on Account, Were Estimated to Be

question 87

Multiple Choice

Vela Enterprises Inc.would like to prepare a summary cash budget for March.The following information is available:
?The cash balance at 1 March was estimated to be $\$ 3000$ .
?March sales, all on account, were estimated to be $\$ 50$ 000. Sales are collected over a two-month period with 65 per cent collected in the month of sale and the remainder in the subsequent month. February sales on account were $\$ 60000$ .
?Inventory purchases are expected to be $\$ 20000$ in March. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. February's purchases were $\$ 18000$
?Cash disbursements for selling and administrative expenses are expected to be $\$ 4000$ in March.
?Depreciation expense for March is expected to be $\$ 5000$
?Loan and interest payments for March are expected to be $\$ 25000$ .
What is the cash balance at the end of March expected to be?

• A) $ 8500
• B) $ (3500)
• C) $ 3500
• D) $26 500

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