The Quality Auto Parts Wholesaler maintains an inventory of car parts to supply local car-repair shops. The company is making cash-flow estimates for the coming year. The monthly inventory purchases are sufficient to cover sales for a two-month period, but the bills for those purchases are paid in the month prior to their sale. There is a 20 percent profit margin on sales. Other costs are €2,000 per month and paid in the month incurred. Sales are assumed to be comprised of 10 percent cash sales, 70 percent credit sales that are collected in the following month, and 20 percent credit sales that are collected in the second month following the sales transaction. The cash balance at the beginning of March is €5,000. The following are the expected sales by month:

a. What will the cash balances be for the end of March, April, May, and June?

b. Will the company have to borrow money during the months March through June?

c. Would the firm have to borrow cash if June sales were expected to be €50,000 instead of €15,000?

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Account January February March April May June July August Sales () 10,000 12,000 10,000 20,000 25,000 15,000 10,000 20,000