Matthew Young has been working on Sheffield Paints' cash budget for the coming year. Based on his projections for March, the beginning cash balance will be $40,700, cash collections will be $550,000, and cash disbursements will be $584,000. Sheffield Paints desires to maintain a $45,000 minimum cash balance. The company has a 12% open line of credit with its bank, which provides short-term borrowings in $500 increments. All borrowings are made at the beginning of the month, and all repayments are made at the end of the month (in $500 increments). Accrued interest is paid at the time of repayment.

(a)

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• Correct Answer

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Your answer is correct.

How much will Sheffield Paints need to borrow from the bank at the beginning of March?

Sheffield Paints should borrow

$enter the amount borrowed in dollars

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(b)

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Your answer is partially correct.

Assuming that Sheffield Paints has $20,000 in excess cash budgeted for April, how much principal will the company plan to repay? How much interest will be repaid in April?

Principal to be repaid		$enter the principal repayable amount in dollars
Interest to be repaid		$enter the interest repayable amount in dollars