Question

Jupiter stores had a Quarter 2 beginning cash balance of $647. Sales for Quarters 1 through 3 are estimated at $800. $950 and $1.200, respectively. The cost of goods sold is equal to 59 percent of sales. Goods are purchased one quarter prior to the month of sale. The accounts payable period is 30 days, and the accounts receivable period is 15 days. The firm had quarterly cash expenses of $210. What was the cash balance at the end of Quarter 2. Assume a 360 day year Multiple Choice O 367487 O $66667 O $2007 571939 O S6000

Answer 1

Answer is given below with working notes

Answer is $703.17 Opening cash balance Add: Cash collections Q1 Cash collections Q2 $647.00 $133.33 ($800*15/90) $791.67 ($950*75/90) $1,572.00 Less: Payment to vendors Q1 Payment to vendors Q2 Cash expense Total payments $186.83 ($560.50*30/90) $472.00 ($708*60/90) $210.00 $868.83 Cash balance $703.17 Working notes: Sales COGS - 59% Q1 $800.00 $472.00 Q2 Q3 $950.00 $1,200.00 $560.50 $708.00