On-The-Level Manufacturing buys materials on credit at the start of th

On-The-Level Manufacturing buys materials on credit at the start of the month and pays in 60 days. They also sell on credit, bill customers at the beginning of the month, and receive payment 30 days later.

Using Table 6.2, what is the net cash flow from purchases and sales for the month of February?
A) $40,000
B) $45,000
C) -$45,000
D) There is NOT enough information to answer this question.

ANSWER

D
Explanation: D) We need to know the amount of purchases from December to answer this question.