The Grainger Company's Budgeted Profit and Loss Statement Reflects the Following

question 43

Multiple Choice

The Grainger Company's Budgeted Profit and Loss Statement reflects the following amounts:
Sales are collected 50 per cent in the month of sale, 30 per cent in the month following sale, 19 per cent in the second month following sale and 1 per cent is uncollectible. The uncollectible accounts are expensed at the end of the year.
Grainger pays for purchases by the fifth of the month following purchase, to take advantage of the 3 per cent discount allowed.
On January 1, Grainger had a cash balance of $88 000 and an accounts receivable balance of $58 000; $35 000 on account will be collected in January with the remaining balance to be collected in February. Grainger had an accounts payable balance of $72 000 on January 1. Invoices are recorded at their gross amount.
The monthly expense figures include $5000 in monthly depreciation. The expenses are paid for in the month incurred.
What is Grainger's expected cash balance at the end of January?

• A) $92 000
• B) $94 160
• C) $87 000
• D) $89 160

---

Definitions:

Content Creation

The process of generating topic ideas, producing, and sharing information to a targeted audience, especially in digital formats.

Boutique Agency

A small, specialized firm offering personalized and niche services in areas such as marketing, advertising, or public relations.

Community Manager

A professional responsible for building, managing, and maintaining an engaging community for a brand or organization online.

Social Media Manager

A professional responsible for creating, curating, and managing published content on social media platforms.