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The following information pertains to Woodburn Company: ∙ ...
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The following information pertains to Woodburn Company:
Month
|
Sales
|
Purchases
|
January
|
$60,000
|
$32,000
|
February
|
$80,000
|
$40,000
|
March
|
$100,000
|
$56,000
|
∙ Cash is collected from customers in the following pattern: 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 $30,000 per month (including $8,000 of depreciation). Both of these payments are made in the month incurred.
∙ The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
QUESTION31. How much cash will be collected from customers in March?