Reference no: EM132140794

Question - Vela Enterprises Inc. would like to prepare summary cash budget for March. The following information is available:

The cash balance at 1 March was estimated to be $8 000.

March sales, all on account, were estimated to be $90 000. Sales are collected over a two-month period with 65 per cent collected in the month of sale and the remainder in the subsequent month.

February sales on account were $65 000.

Inventory purchases are expected to be $40 000 in March. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. February's purchases were $35 000.

Cash disbursements for selling and administrative expenses are expected to be $6000 in March.

Depreciation expense for March is expected to be $7000.

Loan and interest payments for March are expected to be $35 000.

What is the cash balance at the end of March expected to be?

$(8500)

$13 250

$10 750

$14 500