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A cash budget for the first three quarters of a retail company is given below (000 omitied) cash balance of at least $5,000 to start
A cash budget for the first three quarters of a retail company is given below (000 omitied) cash balance of at least $5,000 to start each quarter. If necessary, the company will borrow moncy from its bank to maintain this balance. The company will pay no interest in Quarters 1, 2, and 3. It will repay as much of its borrowings as possible as soon as it has more than $5,000 in cash in a given quarter. Suppose the company starts the first quarter with o bank debt. How much total bank debt does the company expect to have at the end of the third quarter? Cash balance, beginning S9 124 Add collections from customers 90 otal cash available Less disbursements: 54 64 65 Purchase of inventory 45 39 48 Selling and administrative expenses Equipment purchases Dividends Total disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Total financing Cash balance, ending a. $41,000 b. $45,000 c. $37,000 d. $39,000 e. None of the above
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