How much cash will be collected from customers in March?

ACCOUNTING

Multiple Choice

The following information pertains to Tiffany Company:



Month Sales Purchases

January $30,000 $16,000

February $40,000 $20,000

March $50,000 $28,000



· Cash is collected from customers in the following manner:

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 $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred.

· The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.



How much cash will be collected from customers in March?

a. $47,000

b. $43,000

c. $50,000

d. None of the above

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