AB 209 STUDY Education Terms/ab209study.com AB 209 STUDY Education Terms/ab209study.com | Page 16

Assume the owner gets a cash disbursement in Oct of 45,000,
Nov of 51,000, and
Dec of 52,000
Assume wages and salaries are 48% of gross monthly sales
Assume rent is $9500 a month
Assume utilities are 5% of gross monthly
Assume a tax prepayment of $16,000 in
October
Assume bank interest on the note is $15000/month
Assume a depreciation expense of $15,000 in
December
Answer the questions: Does the firm need to borrow money
at the end of the year to meet expenses?
Why or why not?
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