Problem #7 (25 points)

The following information pertains to Martinez Company:

MonthSalesPurchases

January$72,000$48,000

February$102,000$55,000

March$138,000$74,000

Cash is collected from customers in the following manner:

Month of sale44%

Month following the sale56%

60% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.

Labor costs are 30% of sales. Other operating costs are $52,000 per month (including $15,000 of depreciation). Both of these are paid in the month incurred.

The cash balance on March 1 is $19,000. A minimum cash balance of $12,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

Required:

How much cash will be disbursed in total in March?