Table 1 Dunder Company's Projected Sales for the First Six Months of Months

question 21

Multiple Choice

Table 1
Dunder Company's projected sales for the first six months of 2017 are given below:
25% of sales is collected in cash at the time of the sale, 50% is collected in the month following the sale and the remaining 25% is collected in the second month following the sale.Cost of goods sold is 75% of sales.Purchases are made in the month prior to the sale, and payments for purchases are made in the month of the sale.Total other cash expenses are $60,000/month.The company's cash balance as of February 28, 2017, will be $40,000.Excess cash will be used to retire short-term borrowing (if any) .Dunder has no short-term borrowing as of February 28, 2017.Assume that the interest rate on short-term borrowing is 1% per month.The company must have a minimum cash balance of $25,000 at the beginning of each month.Round all answers to the nearest $100.
-Based on the information in Table 1, what is Dunder Company's projected EBIT for March 2017?

• A)($10,000)
• B)($30,000)
• C)$70,000
• D)None of the above

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Definitions:

Non-Importation Act

Legislation passed by various American colonies in the 1760s and 1770s to protest British policies by refusing to import British goods.

War Of 1812

The War of 1812 was a military conflict fought between the United States and Britain from 1812 to 1815, primarily over British restrictions on U.S. trade and America's desire to expand its territory.

Impressment

The act of forcibly taking men into a navy or military service without notice, often practiced by the British Navy against American sailors in the early 19th century.

Macon's Bill Number 2

Legislation passed by the United States Congress in 1810, aimed at motivating Great Britain and France to stop seizing American ships during the Napoleonic Wars by restoring trade with the country that ceased its attacks on American shipping.