Question

Philip Morris expects the sales for his clothing company to be $530,000 next year. Philip notes that net assets (Assets − Liabilities) will remain unchanged. His clothing firm will enjoy a 10 percent return on total sales. He will start the year with $130,000 in the bank.What will Philip's ending cash balance be?

Answer 1

Answer:

$183,000

Explanation:

Calculation for the ending cash balance

Opening cash balance $130,000

Add Profit $53,000

(10% Return on total sales× Sales amount of $530,000)

Ending cash balance $183,000

Therefore the ending cash balance will be the amounts of $183,000