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Problem:

Cool Water Inc. sells bottled water. The firm keeps in inventory plastic bottles at 9% of the monthly projected sales. These plastic bottles cost $0.005 each. The monthly sales for the first four months of the coming year are as follows: January 2,200,000 February 2,300,000 March 3,000,000 April 3,000,000.

Requirement:

Question: What is the monthly increase or decrease in cash flow for inventory given that an increase is a use of cash and a decrease is a source of cash?

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170693

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