number 7

The cash budget for the first three quarters of the HICASH-514 company is given below (000 omitted). The company requires a minimum cash balance of $5,000 to start each quartet. If necessary, the company will borrow money from its bank to maintain

this balance. The company will pay no interest in Quarters 1, 2, and 3. it will repay as much of its borrowings as possible as soon as it has more than $5,000 in cash in a given quarter Suppose the company starts the first quarter with no bank debt. How

much total bank debt does the company expect to have at the end of the third quarter?

Cash Budget Cash balance, beginning Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Total financing Cash balance, ending Multiple Choice $46,000 Quarter (000 omitted) 1 2 3 $9 ? 88 128 ? ? 56 65 39 45 10 2 N00 8 2 ? ? ? ? ? ? ? ? ? ? ? ? 87 ? 65 48 11 2