A Company Is Preparing Its Cash Budget for the First

Multiple Choice

A company is preparing its cash budget for the first quarter of the year.It has $1,000 in cash at the beginning of the period.Cash sales for the quarter are budgeted at $30,000.Selling and administrative expenses are budgeted at $8,000, which includes $2,000 depreciation.Cash expenses are paid in the month incurred.Cash payment for inventory purchases are budgeted at $25,000.The desired cash balance on March 31 is $5,000.How much financing will the company need during the quarter?

A) $0
B) $2,000
C) $5,000
D) $7,000