Bookworm Publishers publishes books and they have gathered the following data fo

Question

Bookworm Publishers publishes books and they have gathered the following data for the month of October: Cash on 8/1 Expected Cash Collections Direct Materials Cash Disbursements Direct Labor Cash Disbursements MOH Cash Disbursements Operating Expenses Cash Disbursements Capital Expenditures Cash Disbursements Data S9,000 $355,000 $67,000 $47,000 $44,000 $87,000 $125,000 Bookworm Publishers requires an ending cash balance of at least $5,000 and can borrow from a line of credit in $1,000 increments. How much cash does Bookworm Publishers need to borrow for October? O A. $11,000 O B. $6,000 O C. $5,000 O D. $O

Explanation / Answer

Calculate need of borrow :

so answer is a) $11,000

Beginning cash balance 9000 expected cash collection 355000 Total cash available 364000 Cash disbursement (370000) Cash excess (deficiency) over disbursement (6000) Beginning cash balance 5000 Borrow need 11000

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