Question - Cristoff Corporation, a merchandising company, has provided the following budget data:
|
|
Inventories
|
Sales
|
|
January
|
$42,000
|
$72,000
|
|
February
|
$48,000
|
$66,000
|
|
March
|
$36,000
|
$60,000
|
|
April
|
$54,000
|
$78,000
|
|
May
|
$60,000
|
$66,000
|
Collections from customers are normally 70% in the month of sale and 30% in the month following the sale.
Cristoff pays for inventory purchases in the month following the purchase.
Cristoff paid cash dividends of $10,000 during February.
Operating expenses requiring cash are paid in the month they are incurred. Operating expenses are expected to be $14,400 for February. The 14,400 includes $7,000 of depreciation expense.
Cristoff's cash balance at February 1 was $22,000.
A. Compute the expected cash collections during February.
B. Compute the expected cash balance at the end of February.