III. MonthSalesPurchases

October$90,000$50,000

November$120,000$70,000

December$144,000$73,000

Cash is collected from customers in the following manner:

Month of sale30%

Month following the sale70%

40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.

Labor costs are 20% of sales. Other operating costs are $42,000 per month (including $15,000 of depreciation). Both of these are paid in the month incurred.

The cash balance on December 1 is $10,000. A minimum cash balance of $7,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

How much cash will be used in total in December?