Bantam Industries Has Budgeted the Following Information for March If There Is a Cash Shortage, the Company Borrows Money

question 94

Multiple Choice

Bantam Industries has budgeted the following information for March: $$\begin{array} { | l | r | } \hline \text { Cash receipts } & \$ \quad 271,000 \\\hline \text { Beginning cash balance } & 5,000 \\\hline \text { Cash payments } & 280,000 \\\hline \text { Desired ending cash balance } & 25,000 \\\hline\end{array}$$ If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments and interest is paid monthly at 1% on the first day of the following month. The company had no debt before March 1^st. The shortage or surplus of cash before considering cash borrowed in March would be:

• A) $25,000 shortage.
• B) $29,000 shortage.
• C) $29,000 surplus.
• D) $4,000 shortage.

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Definitions:

Voluntary Eating

The act of choosing what and when to eat, guided by individual preferences and physiological signals of hunger and satiety.

Sucking Reflex

A newborn’s built-in reaction of automatically sucking an object placed in its mouth. The sucking reflex enables the infant to get nourishment before it has associated a nipple with food.

Tonic Neck

A reflex in infants where turning the head to one side results in the arm on that side stretching out and the opposite arm bending at the elbow.

Rooting Reflex

An automatic response seen in newborns, where they turn their head toward anything that strokes their cheek or mouth.