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The Cabello Company buys air conditioners for $3,900 and sells them for $4,800 each; the company has the following sales fore
The company had cash of $22,000, equipment of $36,000 and zero accounts payable on April 1st. D1. What amount of cash would a
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Answer #1
April May June July
Sales forecast (units) 120 140 180 160
S.P $         4,800 $       4,800 $        4,800 $           4,800
Sales forecast ($) $   5,76,000 $ 6,72,000 $ 8,64,000 $     7,68,000
Sales forecast (units) 120 140 180 160
Ending inventory 21 27 24
Less:Opening inventory -20 -21 -27 -24
Purchases reqd 121 146 177
Purchase cost per unit $         3,900 $       3,900 $        3,900
Total Purchases $   4,71,900 $ 5,69,400 $ 6,90,300
Payment for
Current period purchases $   3,77,520 $ 4,55,520 $ 5,52,240
Previous period purchases 0 $     94,380 $ 1,13,880
Rent $      15,000 $     15,000 $     15,000 $        15,000
Salaries $      80,000 $     80,000 $     80,000 $        80,000
1)
Particulars April May
Opening balance of cash $      22,000 $ 1,25,480
Sales realization $   5,76,000 $ 6,72,000
Less:
Payment to suppliers $   3,77,520 $ 5,49,900
Rent $      15,000 $     15,000
Salaries $      80,000 $     80,000
Closing balance $   1,25,480 $ 1,52,580
Cash in Balance sheet for May is $ 1,52,580
2)
Question itself specifies that company has zero accounts payable as for April
3)
Closing inventory as at May 27
Purchase cost per unit $         3,900
Closing inventory as at May $   1,05,300

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