Delbert, Inc. has prepared its third quarter budget and provided the following data: Jul Aug Sep Cash collections $49,000 $39,500 $46,000 Cash payments: Purchases of direct materials 30,000 22,100 17,600 Operating expenses 12.400 8,500 11,400 Capital expenditures 13,300 24,200 0 The cash balance on June 30 is projected to be $5,300. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. How much will the company have to borrow at the end of July? OA. $15,000 OB. $10,000 OC. $5,000 OD. $0
Delbert, Inc. has prepared its third quarter budget and provided the following data: Jul Aug Sep Cash collections $49,000 $39,500 $46,000 Cash payments: Purchases of direct materials 30,000 22,100 17,600 Operating expenses 12.400 8,500 11,400 Capital expenditures 13,300 24,200 0 The cash balance on June 30 is projected to be $5,300. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. How much will the company have to borrow at the end of July? OA. $15,000 OB. $10,000 OC. $5,000 OD. $0
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
Related questions
Question
![Delbert, Inc. has prepared its third quarter budget and provided the following data:
Jul
Aug
Sep
Cash collections
$49,000
$39,500
$46,000
Cash payments:
Purchases of direct materials
30,000
22,100
17,600
Operating expenses
12.400
8,500
11,400
Capital expenditures
13,300
24,200
0
The cash balance on June 30 is projected to be $5,300. The company has to maintain a minimum cash balance
of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments
of $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to take
place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus
cash. How much will the company have to borrow at the end of July?
OA. $15,000
OB. $10,000
OC. $5,000
OD. $0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5c4006ef-de4b-4f82-aa94-01e0390f20c4%2F588776d3-ce39-4c3d-ae35-f42b5cb4b649%2Fi4oqtx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Delbert, Inc. has prepared its third quarter budget and provided the following data:
Jul
Aug
Sep
Cash collections
$49,000
$39,500
$46,000
Cash payments:
Purchases of direct materials
30,000
22,100
17,600
Operating expenses
12.400
8,500
11,400
Capital expenditures
13,300
24,200
0
The cash balance on June 30 is projected to be $5,300. The company has to maintain a minimum cash balance
of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments
of $5,000 and has to pay interest every month at an annual rate of 4%. All financing transactions are assumed to take
place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus
cash. How much will the company have to borrow at the end of July?
OA. $15,000
OB. $10,000
OC. $5,000
OD. $0
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