The Beatrice Manufacturing Company Increased Its Merchandise Inventory by $17,000

The Beatrice Manufacturing Company increased its merchandise inventory by $17,000 over the year. The company also granted its customers more liberal credit terms which increased the accounts receivable by $37,500. Sales were $975,000 and the accounts payable decreased by $27,500. The gross profit on sales is 45%. Marketing and administrative expenses were $145,000; this included depreciation expense of $4,000. What were the cash disbursements for the year?

A) $721,750.
B) $706,500.
C) $689,500.
D) $599,750.

Correct Answer:

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