Lindsey Chocolate, Inc. has prepared its third quarter budget and provided the following data:

The cash balance on June 30 is projected to be $4,000. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. Calculate the ending projected cash balance before financing for August.

(a) $9067 (b) $5000 (c) $48,200 (d) $(5,933)

Cash collections Cash payments Purchases of direct materials Operating expenses Capital expenditures Aug Sep Jul $51 S39.600 S46.900 31.000 21.100 17800 12.000 S.500 11.500 13400 24500 0