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The cash budget for the first three quarters of the HICASH-511 company is given below (000 omitted). The company requires a minimum casn balance of
The cash budget for the first three quarters of the HICASH-511 company is given below (000 omitted). The company requires a minimum casn balance of $5,000 to start each quartet if necessary, the company wit 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 es 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 bars debt does the company expect to have at the end of the third quarter? Cash Budget Quarter (000 omitted) 1 2 3 + Cesh balance, beginning 57 Add collections from customers mn 129 Total cash available Less disbursements Purchase of inventory 56 00 Seling and administrative expenses 41 45 Equipment purchases 10 Dividends Total disbursements Excess (dehciency) of cash avaliable over disbursements Financing Borrowings Repayments Total financing Cash balance, ending Multiple Choice $52,000 O $6.000 O $40,000 $18.000 9 2 2 119 05 50 12 2
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