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Orleans Company has the following sales forecast for the three months of the first quarter of next year: Month Sales January $20,000 February 30,000 March
Orleans Company has the following sales forecast for the three months of the first quarter of next year: Month Sales January $20,000 February 30,000 March 40,000 Collection pattern: 75% of sales are collected in the month of the sale; and 25% is collected in the following month. Accounts Receivable balance (January 1): $3,750 Cash balance (January 1): $5,000 Minimum cash balance is $5,000. Cash can be borrowed from the local bank (assume no interest charges). Calculate the expected amount Orleans Company will need to borrow from the bank at the end of January in order to maintain its minimum monthly cash balance. Assume that cash is received only from customers and that $25,000 is cash disbursement or payment expected during January. O a $23,750 O b. $6,250 Oc$25,000 O d. $5,000 O e $1,250
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