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Management wants to know if there will be a need for short-term financing in February. Essential...

Management wants to know if there will be a need for short-term financing in February. Essential information is as follows:

  1. Estimated sales for January and February are $1 million and $700,000, respectively.
  2. Fifty percent of sales are for cash and 50 percent are credit sales that are collected the next month.
  3. Cash disbursements that vary with sales are 30 percent of sales.
  4. Fixed operating disbursements are $300,000 a month.
  5. Depreciation expense is $60,000 a month.
  6. A tax payment of $80,000 is due in January.
  7. A bond payment of $250,000 is owed and will be due in February.
  8. The cash balance at the beginning of January is $16,000.
  9. Management seeks a minimum cash balance of $13,000.
  10. December credit sales were $110,000.

Round your answers to the nearest dollar. Use a minus sign to enter shortage of cash, if any.

January February
Excess (shortage) of cash $    $   

The firm will or will not need short-term funds in February.

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