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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

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 1E: The sales department of Macro Manufacturing Co. has forecast sales for its single product to be...
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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
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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