Please provide detailed instructions on how to solve both qu

Please provide detailed instructions on how to solve both questions. Thank you.

The following data have been taken from the budget reports of Sequoia Company, a merchandising company, which purchases merchandise inventory and sells to customers. The information on the sales to customers and the purchase of the inventory is given below Fe March Sales Purchases $100,000$200,000 S160,000 $160.000 May 240.000 $280,000f $260.000 $140.000 $160,000$154,000 Additional Information: 280,000 a. b. c· d. e. f. The % of purchases paid for cash at the time of purchase The % of purchases paid in the next month after the purchase: The % of purchases paid in the second month after the purchase: Purchases for November and December in the previous year: The Collections are expected to be as follows: 40% 30% 30% $ 150,000 per month Sold is 2,oo 60% in the month of the sale 40% in the month following the sale g. Employee wages are 10% of sales for the month in which the sales occur and paid during the Other administrative expenses are 20% of the following month\'s sales and the entire amount is paid during the current month. This amount includes depreciation expense for the office equipment of $13,000 h. . Interes payments of $2.100 are paid quarterly in January and April(monthly interest is s700).313°J j. k. Sequoia is planning to declare cash dividends in April to be paid in May: The balance in Retained Earnings is expected to be $210,000 on March 31 S10,000 6 Sequoia\'s accounts receivable balance at the end of April would be: Collectim. A. $168,000 S112,000 None of the above. s cash disbursements for the month of April would be: Merih B. C. $75,200 S157,600 $226,700 E. None of the above. Page 5 14

Solution

Correct option for Answer 6 (D)

Balance of Accounts Receivables at the end of April

Since 60% is collected in month of sale and 40 % in next month. The only amount due at the end of April would be 40% of April’s sale

April sale value

280000

Less- Collected in April (60%)

168000

Accounts Receivables Balance

112000

Correct option for Answer 7 (D)

Calculation of cash disbursements during April

Payment for Purchases

40% for april purchase

$ 61,600.00

30% for march purchase

$ 48,000.00

30% for February purchase

$ 48,000.00

$ 157,600.00

Employees Wages (10% 0f sales)

$    28,000.00

Other Administrative expenses(20% of next month sale ,260000*20%)

$    52,000.00

Interest paid(for Quarter)

$      2,100.00

Total

$ 239,700.00

Less: Non cash Expenses(depreciation)

$    13,000.00

Total Cash Disbursements in April

$ 226,700.00

Note* Dividend is only declared in April but actual payment is done in may. Dividend will not be included in April’s Cash Disbursements.

Correct option for Answer 6 (D)
Balance of Accounts Receivables at the end of April
Since 60% is collected in month of sale and 40 % in next month. The only amount due at the end of April would be 40% of April’s sale