Sipan Retail Company was recently created with a beginning cash balance of $12,000. The owner expects the following for the first month of operations: Cash sales to customers $8,000 Sales on account to customers $30,000 Cash collected from account customers $12,000 Cost of merchandise purchased $35,000 Cash paid for merchandise purchased $24,500 Cost of merchandise sold $26,600 Cash paid for display cases $9,600 Selling and administrative expenses $4,000 The display cases above were purchased at the beginning of the month and are being depreciated at a rate of $200 per month. This amount is included in the selling and administrative expenses figure above. All other selling and administrative expenses are paid as incurred. Sipan wants to maintain a cash balance of $10,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end. 75. In Sipan's cash budget for this first month, how much money will Sipan need to borrow at month end? A) $7,000 B) $16,000 C) $17,000 D) $28,000
Sipan Retail Company was recently created with a beginning cash balance of $12,000. The owner expects the following for the first month of operations: Cash sales to customers $8,000 Sales on account to customers $30,000 Cash collected from account customers $12,000 Cost of merchandise purchased $35,000 Cash paid for merchandise purchased $24,500 Cost of merchandise sold $26,600 Cash paid for display cases $9,600 Selling and administrative expenses $4,000 The display cases above were purchased at the beginning of the month and are being depreciated at a rate of $200 per month. This amount is included in the selling and administrative expenses figure above. All other selling and administrative expenses are paid as incurred. Sipan wants to maintain a cash balance of $10,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end. 75. In Sipan's cash budget for this first month, how much money will Sipan need to borrow at month end? A) $7,000 B) $16,000 C) $17,000 D) $28,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sipan Retail Company was recently created with a beginning cash balance of $12,000. The owner expects the following for the first month of operations:
Cash sales to customers $8,000
Sales on account to customers $30,000
Cash collected from account customers $12,000
Cost of merchandise purchased $35,000
Cash paid for merchandise purchased $24,500
Cost of merchandise sold $26,600
Cash paid for display cases $9,600
Selling and administrative expenses $4,000
The display cases above were purchased at the beginning of the month and are being depreciated at a rate of $200 per month. This amount is included in the selling and administrative expenses figure above. All other selling and administrative expenses are paid as incurred. Sipan wants to maintain a cash balance of $10,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end.
75. In Sipan's cash budget for this first month, how much money will Sipan need to borrow at month end?
A) $7,000
B) $16,000
C) $17,000
D) $28,000
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