The following information was reported in a cash budget: Beginning cash balance

Question

The following information was reported in a cash budget: Beginning cash balance $280,000 Cash payments 533,000 Cash receipts 370,000 Minimum cash balance desired 200,000 How much cash will the company have to borrow in order to meet its required needs? Answer a. $83,000 b. $0 c. $163,000 d. $103,000 The following information was reported in a cash budget: Beginning cash balance $280,000 Cash payments 533,000 Cash receipts 370,000 Minimum cash balance desired 200,000 How much cash will the company have to borrow in order to meet its required needs? The following information was reported in a cash budget: Beginning cash balance $280,000 Cash payments 533,000 Cash receipts 370,000 Minimum cash balance desired 200,000 How much cash will the company have to borrow in order to meet its required needs? $83,000 $0 $163,000 $103,000 Beginning cash balance $280,000 Cash payments 533,000 Cash receipts 370,000 Minimum cash balance desired 200,000

Explanation / Answer

Hi,

Please find the answer as follows:

Ending Cash Balance = 280000 + 370000 - 533000 = 117000

Desired Balance = 200000

Therefore, the amount of borrowings would be = 200000 - 117000 = 83000

Answer is 83000 (Option A)

Thanks.

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