Morrison, Inc. sells a medical device to hospitals nationwide. The price of the device is $300 per unit. Hospitals pay Morrison for their purchases over two months (50% each). Morrison procures the device from a supplier in Asia for $200. The supplier expects immediate payments. Morrison has budgeted the following data for the second quarter of fiscal year 2024: Sales (in units) March (Actual) 1,800 Cash, beginning balance Selling and administrative (including depreciation of $60,000). Required minimum cash balance April May June 2,000 2,500 2,100 $54,000 ? ? $250,000 $250,000 $250,000 $50,000 $50,000 $50,000 Q: The selling and administrative expenses include $60,000 of depreciation. If necessary, the company will borrow cash from a bank through their credit-line arrangement on the first day of each month. Assume that they can borrow in increments of $1,000. The bank requires an interest payment at the end of each month at a monthly rate of 1%, starting from the first month in which the company borrows cash. How much cash does Morrison need to borrow on April 1? Answer: (Click to select)

Morrison, Inc. sells a medical device to hospitals nationwide. The price of the device is $300 per unit. Hospitals pay Morrison for their purchases over two months (50% each). Morrison procures the device from a supplier in Asia for $200. The supplier expects immediate payments. Morrison has budgeted the following data for the second quarter of fiscal year 2024: Sales (in units) March (Actual) 1,800 Cash, beginning balance Selling and administrative (including depreciation of $60,000). Required minimum cash balance April May June 2,000 2,500 2,100 $54,000 ? ? $250,000 $250,000 $250,000 $50,000 $50,000 $50,000 Q: The selling and administrative expenses include $60,000 of depreciation. If necessary, the company will borrow cash from a bank through their credit-line arrangement on the first day of each month. Assume that they can borrow in increments of $1,000. The bank requires an interest payment at the end of each month at a monthly rate of 1%, starting from the first month in which the company borrows cash. How much cash does Morrison need to borrow on April 1? Answer: (Click to select)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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