Company X is preparing its cash budget for the first quarter of the year. It has $2,000 in cash at the beginning of the period. Cash collections from customers for the quarter are budgeted at $90,000. Cash payment during the quarter for inventory purchases are budgeted at $50,000. The desired cash balance at the end of the quarter is $10,000. The company is also planning to purchase equipment for $25,000 cash. Other operating expenses for the quarter are budgeted at $18,000, which includes $4,000 depreciation. Cash expenses are paid in the month incurred. How much borrowing will the company need during the quarter? O a. $11,000 O b. $7,000 O c. $9,000 O d. None of the given answers O e. $10,000
Company X is preparing its cash budget for the first quarter of the year. It has $2,000 in cash at the beginning of the period. Cash collections from customers for the quarter are budgeted at $90,000. Cash payment during the quarter for inventory purchases are budgeted at $50,000. The desired cash balance at the end of the quarter is $10,000. The company is also planning to purchase equipment for $25,000 cash. Other operating expenses for the quarter are budgeted at $18,000, which includes $4,000 depreciation. Cash expenses are paid in the month incurred. How much borrowing will the company need during the quarter? O a. $11,000 O b. $7,000 O c. $9,000 O d. None of the given answers O e. $10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Company X is preparing its cash budget for the first quarter of the year. It has $2,000 in cash at the
beginning of the period. Cash collections from customers for the quarter are budgeted at $90,000. Cash
payment during the quarter for inventory purchases are budgeted at $50,000. The desired cash balance at
the end of the quarter is $10,000. The company is also planning to purchase equipment for $25,000 cash.
Other operating expenses for the quarter are budgeted at $18,000, which includes $4,000 depreciation.
Cash expenses are paid in the month incurred. How much borrowing will the company need during the
quarter?
O a. $11,000
O b. $7,000
O c. $9,000
Od. None of the given answers
O e. $10,000
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