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The following information pertains to Hepburn Company. Month Sales Purchases January $30000 $12600 February $30000 $12900 March $33000 $13900 Cash is collected from customers 30percent
The following information pertains to Hepburn Company.
Month | Sales | Purchases |
January | $30000 | $12600 |
February | $30000 | $12900 |
March | $33000 | $13900 |
- Cash is collected from customers 30percent in the month of the sale and 70in the month immediately following the sale.
- 40percent of purchases are paid for in cash in the month of the purchase, and the balance is paid the following month.
- Labor costs are 16percent of sales. Other operating costs are $24000per month, including $8000of depreciation. These costs are paid in the month incurred.
- The cash balance on March 1st is $11000.
- A minimum cash balance of $10000 is required at the end of the month.
- Money can be borrowed in multiples of $250.
What amount must the Hepburn Company borrow in March to meet its desired minimum cash balance on March 31st?
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