Reference no: EM132034162

Question - Morgan Company's budgeted income statement reflects the following amounts:

Sales Purchases Expenses

January $119,000 $77,000 $23,900

February 109,000 65,000 24,100

March 124,000 80,250 26,900

April 129,000 83,500 28,500

Sales are collected 50% in the month of sale, 20% in the month following sale, and 29% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year.

Morgan pays for all purchases in the month following purchase and takes advantage of a 1% discount. The following balances are as of January 1:

Cash$87,000

Accounts receivable* 57,000

Accounts payable 71,000

Of this balance, $22,800 will be collected in January and the remaining amount will be collected in February.

The monthly expense figures include $4,900 of depreciation. The expenses are paid in the month incurred.

Morgan's budgeted cash receipts in February are:

$82,300.

$112,500.

$111,590.

$78,300.

$112,140.