Explore BrainMass

Explore BrainMass

    Cash budget-cash flow

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Use the information below to answer the following question(s).

    The following information pertains to Tiffany Company:
    Month Sales Purchases
    January $30,000 $16,000
    February $40,000 $20,000
    March $50,000 $28,000

    Cash is collected from customers in the following manner:
    Month of sale 30%
    Month following the sale 70%

    40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.
    Labor costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.

    The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

    How much cash will be paid to suppliers in March?

    a. a. $28,000
    b. b. $44,000
    c. c. $23,200
    d. d. None of the above is correct.

    © BrainMass Inc. brainmass.com June 3, 2020, 9:58 pm ad1c9bdddf
    https://brainmass.com/business/cash-management/cash-budget-cash-flow-208224

    Solution Preview

    How much cash will be paid to suppliers in March?

    a. a. $28,000
    b. b. $44,000
    c. c. $23,200
    d. d. None of the above is ...

    Solution Summary

    Calculates cash that will be paid to suppliers.

    $2.19

    ADVERTISEMENT