Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August

Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash disbursements during August. Southland Company wants to maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:

$0.

$10,000.

$6,700.

$7,000.

$27,700.

Beginning cash balance	$17,000
Add cash receipts	120,800
Less cash disbursements	(134,500)
Cash balance before financing	$3,300
Desired cash balance	10,000
Amount to borrow	$6,700

Frankie's Chocolate Co. reports the following information from its sales budget:

Expected Sales:	July	$90,000
	August	104,000
	September	120,000

Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is:

$30,000.

$78,000.

$108,000.

$120,000.

$130,500.

September cash sales (25% * $120,000)	$30,000
August credit sales (75% * $104,000)	78,000
Cash collected in September	$108,000

Funcycle Manufacturing's budget includes the following credit sales for the current year: September, $145,000; October, $136,000; November, $120,000; December, $157,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 50% in the first month after sale, and 35% in the second month after sale. What are the cash collections of credit sales in the month of December?

$23,550.

$107,600.

$83,550.

$157,000.

$131,150.

15% of December sales (15% * $157,000)	$23,550
50% of November sales (50% * $120,000)	60,000
35% of October sales (35% * $136,000)	47,600
Total cash receipts	$131,150