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AssumeDaisy Consulting beganJanuary with$17,000 cash. Management forecasts that cash receipts from credit customers will be$53,000inJanuary and$57,000 inFebruary. Projected cash payments include equipment purchases ($24,000inJanuary and$42,000

AssumeDaisy Consulting beganJanuary with$17,000 cash. Management forecasts that cash receipts from credit customers will be$53,000inJanuary and$57,000 inFebruary. Projected cash payments include equipment purchases ($24,000inJanuary and$42,000 inFebruary) and selling and administrative expenses ($2,000 eachmonth).Daisy's bank requires a $32,000 minimum balance in the firm's checking account. At the end of any month when the account balance falls below$32,000, the bank automatically extends credit to the firm in multiples of$5,000.Daisy borrows as little as possible and pays back loans each month in$1,000 increments, plus10% interest on the entire unpaid principal. The first payment occurs one month after the loan.

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1.PrepareDaisy Consulting's cash budget forJanuary andFebruary2018.

2.How much cash willDaisy borrow inFebruary if cash receipts from customers that month total$52,000 instead of$57,000?

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