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Romona Company expects its November sales to be 15% higher than its October sales of $210,000. Al sales are on credit and are
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Answer: B

November sale = October sale × (1 + rate of increase)

                        = 210,000 × (1 + 0.15)

                        = 210,000 × 1.15

                        = 241,500

Collection for sale = November sale × 30% + October sale × 65%

                              = 241,500 × 30% + 210,000 × 65%

                              = 72,450 + 136,500

                              = 208,950

Payment for purchases = November purchases × 30% + October purchases × 70%

                                    = 190,000 × 30% + 100,000 × 70%

                                    = 57,000 + 70,000

                                    = 127,000

November 30 (ending) cash = November 1 (beginning) cash + Collection for sale – Payment for purchases

                                                = 13,100 + 208,950 – 127,000

                                                = 95,050

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