The following information pertains to Hepburn Company:

Month Sales Purchases

December $90,000 $40,000

January $60,000 $32,000

February $80,000 $40,000

March $100,000 $56,000

Cash is collected from customers in the following manner:

Month of sale 30%

Month following the sale 70%

40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month.

Labor costs are 20% of sales. Other operating costs are $30,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred.

The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.

What is the surplus or deficit of cash for March, before borrowings?

A) $5,600 deficit

B) $6,000 deficit

C) $5,600 Surplus

D) $6,000 surplus