The cash budget for the first three quarters of the HICASH-932 company is given below (000 omitted). The company requires a minimum cash balance of $5,000 to start each quarter. If necessary, the company will borrow money from its bank to maintain this balance. The company will pay no interes Quarters 1, 2, and 3. It wil repay as much of its 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 bank debt does the company expect to have at the end of the third quarter? Cash Budget Quarter (000 omitted) 1 $8 Cash balence, beginning Add collections from customers 81 129 87 Total cash available Less disbursements: Purchase of inventory 5 65 39 45 Selling and administrative expenses Equipment purchases Total disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Total financing Cash balence, ending Multiple Choice $49,000 $8,000 $14,000 $43,000 0 0 0 0 7

The cash budget for the first three quarters of the HICASH-932 company is given below (000 omitted). The company requires a minimum cash balance of $5,000 to start each quarter. If necessary, the company will borrow money from its bank to maintain this balance. The company will pay no interes Quarters 1, 2, and 3. It wil repay as much of its 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 bank debt does the company expect to have at the end of the third quarter? Cash Budget Quarter (000 omitted) 1 $8 Cash balence, beginning Add collections from customers 81 129 87 Total cash available Less disbursements: Purchase of inventory 5 65 39 45 Selling and administrative expenses Equipment purchases Total disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Total financing Cash balence, ending Multiple Choice $49,000 $8,000 $14,000 $43,000 0 0 0 0 7

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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