Transcript Company Is Preparing a Cash Budget for February

question 105

Essay

Transcript Company is preparing a cash budget for February.The company has $150,000 cash at the beginning of February and anticipates total sales of $800,000,consisting of 25% cash sales and 75% credit card sales.The bank charges 3 percent for credit card transactions.The company sets its selling price at 160 percent of the cost of purchases and pays the cost of each month's sales at the end of the month.Other cash disbursements are $20,000 per month and 4 percent of the total sales.In addition,a $600,000 note will be due in February for equipment purchased last August.Transcript Company has an agreement with its bank to maintain a cash balance of $100,000.
Required: What amount,if any,must the company borrow during February?

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Definitions:

The Counselor

A professional who provides guidance and support to individuals or groups, often in educational, vocational, or psychological contexts.

The Client

In a professional context, refers to an individual or organization that receives services or advice from a professional such as a consultant, lawyer, or therapist.

Observer Drift

A phenomenon in which there is a gradual shift in the way observers record or interpret information over time, leading to inconsistencies.

Disruptive Behavior

Actions that interrupt or hinder the normal flow of activities in a specific context, often seen in educational or workplace settings.