Reference no: EM133062138

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

	Sales	Purchases	Expenses
January	$113,000	$71,000	$23,300
February	103,000	59,000	23,500
March	118,000	74,250	26,300
April	123,000	77,500	27,900

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. Middlefield 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 $81,000

Accounts receivable* 51,000

Accounts payable 65,000

*Of this balance, $20,400 will be collected in January and the remaining amount will be collected in February. The monthly expense figures include $4,300 of depreciation. The expenses are paid in the month incurred. Compute the Morgan's expected cash balance at the end of January?

a) $74,550 b) $81,400 c) $70,250 d) $85,700 e) $93,550