A company is in the process of preparing its selling and administrative budget for next year. Variable selling and administrative expenses are budgeted at $$3\mathrm{.}50$ per unit sold. Monthly fixed selling and administrative expenses include $$10,000$ for advertising; $$20,000$ for salaries; $$5,000$ for depreciation; and $$3,000$ for insurance. In addition, the company needs to pay $$4,000$ in property taxes in February and plans on purchasing two new computers in January for $52,500$ and one in March for $$1,250.$ The company has budgeted $15,000,14,000,$ and $13,000$ units to be sold in January, February, and March, respectively.

What is the January budgeted cash outflow for selling and administrative expenses?

$$85,500$

$$88,000$

$$90,500$

$$93,000$

The forecasted cash receipts and cash payments for a company for the first four months of the year are as follows:

January February March April

Budgeted cash collections $$100,000$ $$80,000$ $$75,000$ $$146,000$

Budgeted cash payments:

Operating expenses $$127,000$ $$105,000$ $$92,000$ $$120,000$

Dividends $$-----$ $ $20,000$ $$------$ $$------$

Equipment purchase $$-----$ $$40,000$ $$------$ $$------$

Total budgeted cash payments $$127,000$ $$165,000$ $$92,000$ $$120,000$

On January $1,$ the company had a cash balance of $$40,000.$ This company has a policy of maintaining a cash balance of at least $$10,000$ at the end of each month.

How much must should the company plan to borrow in February?

$$0$

$$72,000$

$$82,000$

$$85,000$