Question

Worton Distributing expects its September sales to be 25% higher than its August sales of $153,000....

Worton Distributing expects its September sales to be 25% higher than its August sales of $153,000. Purchases were $103,000 in August and are expected to be $123,000 in September. All sales are on credit and are expected to be collected as follows: 40% in the month of the sale and 60% in the following month. Purchases are paid 20% in the month of purchase and 80% in the following month. The cash balance on September 1 is $13,000. The ending cash balance on September 30 is estimated to be

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Answer #1

The ending cashbalance on September 30 is estimated to be:

Ans:.$74,300

Explanation:

1)

Beginning cash balance (given) $ 13000
Cash receipts from credit sales made in August ($153,000 ×60%) $91,800
Cash receipts from credit sales made in September[ $153,000× 1.25 ]× 40% $76500
Cash disbursements from purchases made in August( $ 103,000 × 80%) ($82,400)
Cash disbursements from purchases made in September( $ 123,000 × 20%) ($24,600)
Ending cash balance $74,300
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