Ned's Co. has an average collection period of 45 days and an operating cycle of 130 days. It has a policy of keeping at least $10 on hand as a minimum cash balance, and has a beginning cash balance for the first quarter of $20. Beginning receivables for the quarter amount to $35. Sales for the first and second quarters are expected to be $110 and $125, respectively, while purchases amount to 80% of the next quarter's forecast sales. The accounts payable period is 90 days. What is the ending cash balance for the first quarter?

A) $12
B) $20
C) $22
D) $28
E) $32

The ending cash balance for the first quarter can be calculated by considering the cash inflows and outflows during the period. The cash inflows include collections from sales, and the outflows include payments for purchases and maintaining the minimum cash balance. Given the average collection period of 45 days, all of the first quarter's sales ($110) and a portion of the second quarter's sales will be collected by the end of the first quarter. Purchases for the first quarter are 80% of the second quarter's forecast sales ($125), which equals $100. Given the accounts payable period of 90 days, these purchases will not be paid in the first quarter. Therefore, the ending cash balance includes the beginning cash balance ($20), collections from sales, minus the minimum cash balance requirement ($10), leading to an ending balance of $22 after considering the specific inflows and outflows detailed.