Use the following information to answer the next three questions:

Janus Industries has budgeted the following information for January:

Cash Receipts $40,000

Beginning Cash Balance $10,000

Cash Payments $48,000

Desired Ending Cash Balance $ 7,000

If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments. Interest is paid monthly on the first day of the following month. The interest rate is 1% per month. The company had no debt before January 1^st.

11. The shortage or surplus of cash before considering cash borrowed or interest payments in January would be

a. $5,000 surplus.

b. $10,000 shortage.

c. $7,000 surplus.

d. $2,000 shortage.

13. The amount of interest paid in February would be

a. $50.

b. $300.

c. $0.

d. $100.

13. The amount of interest paid in February would be

a. $50.

b. $300.

c. $0.

d. $100.