est: Chapter 9 & 10 Time Remaini Exam --Required This Question: 2 pts 414 of 23

Question

est: Chapter 9 & 10 Time Remaini Exam --Required This Question: 2 pts 414 of 23 (13 complete)This Test: 50 pts poss Speedy Runner makes running shoes and they have gathered the following data for the month of October Data $15,000 $453,000 $86,000 $41,000 $33,000 $116,000 $185,000 Cash on 10/1 Expected Cash Collections Direct Materials Cash Disbursements Direct Labor Cash Disbursements MOH Cash Disbursements Speedy Runner requires an ending cash balance of at least S 12,000 and can borrow from a line ofereit il $1.000 increments. How much will Speedy Runner need to borrow at the end of October? actu es B. $7,000 ?. $5,000 OD $15 000 BANG & OLUFSEN prt sc pg up

Explanation / Answer

Solution :

Amount borrowed at the end of October = $5,000

Therefore option C is correct.

Cash Budget - Speedy Runner Particulars Amount Beginning Cash balance $15,000.00 Expected cash collection $453,000.00 Direct Materials cash disbursement -$86,000.00 Direct labor cash disbursement -$41,000.00 MOH cash disbursement -$33,000.00 Operating expenses cash disbursement -$116,000.00 Capital expenditure - cash disbursement -$185,000.00 Ending cash balance before borrowing $7,000.00 Amount borrowed $5,000.00 Ending cash balance $12,000.00

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