1. For 2011, Raster Graphics forecasts cash receipts of $405,000 and cash disbursements of $430,000. If the beginning cash balance is $35,000 and the desired ending balance is $21,000, how much must Raster borrow during the year?

• $10,000
• $0
• $25,000
• $11,000

Correct Answer:$11,000

Financing needed: $35,000 + $405,000 - $430,000 - $21,000 = (11,000)

2.Kimball Co. wishes to forecast it cash disbursements relating to inventory for the month of March.Estimated purchases of inventory in January, February, and March are $100,000, 120,000, and $150,000, respectively.Kimball typical pays for 40 percent of its inventory purchased in the month of purchase, 50 percent in the month following purchase, and the remaining 10% in the second month following the purchase.

Given this information, forecasted cash paid for inventory in March is:

• $133,000
• $120,000
• $130,000
• $150,000

Correct Answer:$130,000

Forecasted cash paid in March = $10,000 + $60,000 + $60,000 = $130,000

From January purchases = $100,000 x .10 = $10,000

From February purchases = $120,000 x .50 = $60,000

From March purchases = $150,000 x .40 = $60,000

Can someone please explain in detail how these questions were answered