Reference: 07-14
A cash budget by quarters for the Carney Company is given below (note that some data are missing). Missing data amounts have been keyed with either question marks or lower case letters (a, b, c, etc.); these lower case letters will be referred to in the questions that follow. (It may be necessary to calculate a value for items where a question
mark appears.) The company requires a minimum cash balance of at least $10,000 to start a quarter. All data are in thousands.
Carney Company
Cash Budget

\begin{array}{|l|l|l|l|l|}\hline &{\text { Quarters }} \\\hline &1 & 2 & 3 & 4\\\hline \text { Cash balance, beginning } & \$ 16 & \$ \mathrm{e} & \$ 13 & \$ 10 \\\hline \text { Add collections from customers } & \text { a } & 70 & 67 & 80 \\\hline \text { Total cash available } & ? & ? & 80 & 90 \\\hline \text { Less disbursements: } & & & & \\\hline \text { Purchase of inventory } & 31 & \mathrm{c} & 40 & 35 \\\hline \text { Operating expenses } & 35 & 22 & ? & 15 \\\hline \text { Equipment purchases } & 10 & 14 & 19 & 0 \\\hline \text { Dividends } & 0 & 6 & 0 & 5 \\\hline \text { Total disbursements } & 66 & ? & \mathrm{f} & 55 \\\hline \text { Excess (deficiency) of cash available } & & & & \\\hline \text { over disbursements } & 7 & 17 & (2) & 35 \\\hline \text { Financing: } & & & & \\\hline \text { Borrowings } & \mathrm{b} & - & 12 & - \\\hline \text { Repayments (including interest) } & - & \mathrm{d} & - & (21) \\\hline \text { Total financing } & ? & ? & 12 & (21) \\\hline \text { Cash balance, ending } & \underline{\$ 10} & ? & \$ 10 & \$ 14 \\\hline\end{array}

-The borrowing required during the first quarter to meet the minimum cash balance (item b in thousands)is:
A)$0.
B)$7.
C)$3.
D)$10.

The Willsey Merchandise Company Has Budgeted $40,000 in Sales for the Month

Multiple Choice

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