On May 1, your firm had a beginning cash balance of $175. Your sales for April were $430 and your May sales were $480. During May

On May 1, your firm had a beginning cash balance of $175. Your sales for April were $430 and your May sales were $480. During May, you had cash expenses of $110 and payments on your accounts payable of $290. Your accounts receivable period is 30 days. What is your firm's beginning cash balance on June 1?    A.  $145 B.  $155 C.  $205 D.  $215 E.  $265 Cash balance = $175 - $110 - $290 + $430 = $205

85.

The Mish Mash Store has a beginning cash balance of $440 on March 1. The firm has projected sales of $610 in February, $680 in March, and $740 in April. The cost of goods sold is equal to 70 percent of sales. Goods are purchased one month prior to the month of sale. The accounts payable period is 30 days and the accounts receivable period is 10 days. The firm has monthly cash expenses of $125. What is the projected ending cash balance at the end of March? Assume every month has 30 days.    A.  $461 B.  $496 C.  $507 D.  $567 E.  $621 March collections = (10/30) $610 + (20/30) $680 = $657 March disbursements for payables = 0.70 ($680) = $476 March ending cash balance = $440 + $657 - $476 - $125 = $496

86.

Fancy Footwear has a line of credit with a local bank in the amount of $80,000. The loan agreement calls for interest of 7 percent with a compensating balance of 5 percent, which is based on the total amount borrowed. The compensating balance will be deposited into an interest-free account. What is the effective interest rate on the loan if the firm needs to borrow $75,000 for one year to cover operating expenses?    A.  7.37 percent B.  7.43 percent C.  7.56 percent D.  8.17 percent E.  8.33 percent Amount borrowed = $75,000/(1 - 0.05) = $78,947.37 Annual interest = $78,947.37 × 0.07 = $5,526.32 Effective interest rate = $5,526.32/$75,000 = 7.37 percent