None Avengers Inc. began operations on January 1 of the current year with a $25,000 cashbalance. 40%of sales are collected in the month of sale; 60% are collected in the monthfollowing sale. Similarly,45% of purchases are paid in the month of purchase, and 55% are paid in the month followingpurchase. The following data apply to January - Sales$75000, purchases $60000 and operatingexpenses - $9000 and February Sales $80000, purchases $65000 and operating expenses - $18000. If operating expenses arepaid in the month incurred and include monthly depreciationcharges of $5000, determine the change in Avenger's cash balance during January and Februarymonthseparately and the cash balance at the end of January and February.

Step 1: Facts Sales:January - $75,000February - $80,00040% collection at the month of sale60%…

Answered: Avengers Inc. began operations on…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 14P

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Avengers Inc. began operations on January 1 of the current year with a $25,000 cashbalance. 40% of sales are collected in the month of sale; 60% are collected in the monthfollowing sale. Similarly, 45% of purchases are paid in the month of purchase, and 55% are paid in the month following purchase. The following data apply to January - Sales$75000, purchases $60000 and operating expenses - $9000 and February Sales $80000, purchases $65000 and operating expenses - $18000. If operating expenses arepaid in the month incurred and include monthly depreciation charges of $5000, determine the change in Avenger's cash balance during January and February monthseparately and the cash balance at the end of January and February.

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