AB 209 STUDY Extraordinary Success/ab209study.com AB 209 STUDY Extraordinary Success/ab209study.com | Page 19

Assume monthly sales are $280,000 October, $290,000
November, and $345,000
December
Assume Inventory purchases are $60,000 Oct, $60,000 Nov,
and $70,000
Dec
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?