Epandulo Ltd is a supermarket brand with a financial year ending 31 December. The company’s budgeted information relating to
their cash budget for the year 2022 is as follows:
Q1 Q2 Q3 Q4
Opening Balance 5,000
Account Receivable
collections 100,000 120,000 140,000 170,000
Payments
Materials 25,000 34,000 40,000 50,000
Labour 45,000 44,000 50,000 60,000
Overheads 30,000 25,000 25,000 20,000
Purchase of Equipment 50,000

Epandulo Ltd depreciates their assets in the month following the sale at 10%, using the straight-line method. The owner of the
organization introduced a policy of maintaining a minimum cash balance of N$10,000.
To ensure that the company’s debt to asset ratio remains favourable, Epandulo only borrows when necessary and has a goal to
pay back borrowed funds as quickly as possible, as much as they can in multiples of 1,000. The company has a 15% open line of
credit with a local bank, which allows for interest to be calculated and paid when the principal amount is paid. Borrowed cash is
received at the beginning of the quarter, while repayments are done at the end of the quarter.
Required: How much cash should the company borrow in quarter 1?