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# Cash budget-cash flow

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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.

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#### 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