Exhibit 18-9 Winthrop Merchandising Is Preparing Its Budget for 2011

Exhibit 18-9 Winthrop Merchandising is preparing its budget for 2011 (its first year of operation) . Sales for the year are budgeted at $1,500,000; 20% are cash sales and 80% are credit sales. The company expects to collect 60% of all credit sales in 2011. Budgeted expenses are $1,200,000. These expenditures include $37,500 for depreciation and $745,500 for variable manufacturing overhead.
-
Refer to Exhibit 18-9. If the desired ending cash balance is $45,000, how much must Winthrop borrow during the year?

A) $187,500
B) $142,500
C) $225,000
D) $180,000

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free