# Step-by-Step Solution Let's break this into steps: ## 1. **Calculate Total Cash Available** This is the sum of: - Beginning Cash Balance (on 8/1) - Expected Cash Collections \[ \text{Total Cash Available} = \$14,000 + \$355,000 = \$369,000 \] --- ## 2. **Calculate Total Cash Disbursements** Sum all the cash disbursements: - Direct Materials: $71,000 - Direct Labor: $52,000 - MOH (Manufacturing Overhead): $40,000 - Operating Expenses: $91,000 - Capital Expenditures: $126,000 \[ \text{Total Cash Disbursements} = \$71,000 + \$52,000 + \$40,000 + \$91,000 + \$126,000 = \$380,000 \] --- ## 3. **Calculate Preliminary Ending Cash Balance** \[ \text{Preliminary Ending Cash} = \text{Total Cash Available} - \text{Total Cash Disbursements} \] \[ \text{Preliminary Ending Cash} = \$369,000 - \$380,000 = -\$11,000 \] --- ## 4. **Check Required Minimum Cash Balance** The company requires at least $5,000 as ending cash balance. \[ \text{Cash Shortfall} = \text{Required Ending Cash} - \text{Preliminary Ending Cash} \] \[ \text{Cash Shortfall} = \$5,000 - (-\$11,000) = \$16,000 \] --- ## 5. **Determine Borrowing (in $1,000 increments)** Since the company cannot have negative cash and needs at least $5,000, it must borrow $16,000. --- ## 6. **Final Answer** ### **Excess or Deficiency of Cash for October** - **Deficiency:** $16,000 (the company must borrow this amount to meet the required balance) --- ## **Summary Table** | Item | Amount | |-----------------------------|------------:| | Total Cash Available | $369,000 | | Total Cash Disbursements | $380,000 | | Preliminary Ending Cash | -$11,000 | | Required Ending Cash | $5,000 | | **Cash Deficiency** | **$16,000** | --- ### **Final Answer** > **The cash deficiency for October is $16,000. Wellness Publishing Company must borrow $16,000 to meet its required ending cash balance of $5,000.**