Question

On January 1, Easton Company had cash on hand of $105,000. All of January's $232,000 sales were on account. December sales of $214,000 were also all on account. Experience has shown that Easton typically collects 45% of receivables in the month of the sale and the balance the following month. All materials and supplies are purchased on account and Easton has a history of paying for half of these purchases in the month of purchase and half the following month. Such purchases were $153,000 for December and $151,000 for January. All other expenses including wages are paid in the month incurred. These amounted to $42,000 in December and $76,000 in January. Use this information to determine the projected ending balance of cash on hand for January. (Round answer to the nearest whole dollar)

Answer 1

Calculation of Ending balance of Cash on Hand:

Particulars	Amount ($)
Opening balance of cash on Hand	$105,000
Add:
Cash received from December Sales [214000*(100%-45%)]	$117,700
Cash received from January Sales [232000*(100%-55%)]	$104,400
Less:
Cash payment for supplies of December [153000*(100%-50%)]	$76,500
Cash payment for supplies of December [151000*(100%-50%)]	$75,500
Cash payment of all other expenses including Wages	$76,000
Ending balance of Cash on Hand	$99,100