73. CSO: 1A4b LOS: 1A4x
Cooper Company’s management team is preparing a cash budget for the coming quarter.
The following budgeted information is under review.
January February March
Revenue $700,000 $800,000 $500,000
Inventory purchases 350,000 425,000 225,000
Other expenses 150,000 175,000 175,000
The company expects to collect 40% of its monthly sales in the month of sale and 60% in
the following month. 50% of inventory purchases are paid in the month of purchase, and
the other 50% in the following month. All payments for other expenses are made in the
month incurred.
Cooper forecasts the following account balances at the beginning of the quarter.
Cash $100,000
Accounts receivable 300,000
Accounts payable (Inventory) 500,000
Given the above information, the projected change in cash during the coming quarter will
be
a. $412,500.
b. $300,000.
c. $112,500.
d. $ -0-.
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