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Anonymous

Jan 16, 2025

BusyBody Company expects its November sales to be 20​% higher than its October sales of $ 160 comma 000. Purchases were $ 90 comma

BusyBody Company anticipates that its November sales will be 20% higher than its October sales, which amounted to $160,000. In October, purchases totaled $90,000, and they are expected to rise to $110,000 in November. All sales are made on credit and are collected as follows: 25% in the month of the sale and 70% in the following month. Purchases are paid 30% in the month of purchase and 70% in the following month. The cash balance on November 1 is $13,400. What will the cash balance be on November 30?

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Anonymous

Jan 13, 2025

Cash balance on November 30 = $77,400Explanation:October sales  $160,000November sales $192,000 Calculation: November sales = $160,000 + (160,000 × 20%) = $160,000 + 32,000 = $192,000.Collection from November $48,000As 70% will be collected from the next month, therefore we can collect 70% from the month of October = $112,000Total cash collection in November = $48,000 + $112,000 = $160,000Cash disbursement for the month of November $110,000 × 30% = $33,000 70% from the month of October $90,000 × 70% = $63,000Total cash disbursement = $96,000The cash balance on November 1  = $13,400Add: cash collection                        = $160,000 Less: cash disbursement                = ($96,000)Cash balance on November 30     = $77,400
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