4. A company expects its September sales to be 15% higher than its August sales of $140,000. Purchases were $75,000 in August and are expected to be $85,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. The beginning cash balance on September 1 is $71,500. The ending cash balance on September 30 would be: A. $121,800 B. $148,700 C. $140,300 D. $143,700 E. $135,300

C. $140,300

Explanation:

Cash balance on Sept 1 is $71,500

Sales: $140,000*15%+$140,000

Sales in sept = $21,000+ $140,000

= $161,000

Cash collected Sept =$161,000*30%

= $48,300

Cash collected in sept for August sales = $140,000*70%= $98,000

Purchases Sept = $85,000

Cash purchases = $85,000*25%

= $21,250

Cash purchases in August = $75,000*75%= $56,250

Ending cash bal in Sept = $71,500+ $48,300 + 98,000- $21,250 - 56,250 = $140,300

C $140 300

Explanation:

First we identify credit and cash sales in both months

Item                             August                   September

Sales                           $140000                  15% higher (140000*1.15) =$161000

Purchases                  $75 000                    $85000

Cash sales                                                 for prev month (140000*0.7)=$98000

                                                                  for current month (161000*0.3)=4830

Purchases                                                 for prev month (75000*0.75)=56250

                                                                 for current month (85000*0.25)=21250

Calculate the ending cash balance for September

Opening balance = $71500

So add cash sales and subtract cash purchases = 71500+98000+4830-56250-21250 =$140300

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy

answer; commerce clearing house;