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25 September, 17:09

Bookworm Publishers publishes books and they have gathered the following data for the month of October: DataCash on 8/1 $7,000Expected Cash Collections $350,000Direct Materials Cash Disbursements $62,000Direct Labor Cash Disbursements $45,000MOH Cash Disbursements $43,000Operating Expenses Cash Disbursements $85,000Capital Expenditures Cash Disbursements $125,000Bookworm Publishers requires an ending cash balance of at least $5,000 and can borrow from a line of credit in $1,000 increments. What is the excess or deficiency of cash for October?

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  1. 25 September, 20:33
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    Bookworm

    Inflow of cash

    Opening cash balance = $7,000

    Expected collections = >$350,000

    Total inflow = $357,000

    Outflow of cash

    Direct Materials Cash Disbursements = $62,000

    Direct Labor Cash Disbursements = $45,000

    MOH Cash Disbursements = $43,000

    Operating Expenses Cash Disbursements = $85,000

    Capital Expenditures Cash Disbursements = $125,000

    Total outflow = $360,000

    Net cash deficit = - $3,000

    Available credit line = $1,000

    Cash deficit = $2,000
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