Question

Roman Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $43,000. Budgeted cash receipts are $97,000, while budgeted cash disbursements are $126,000. Roman Company wants to have an ending cash balance of $45,000. How much would Roman Company need to borrow to achieve its desired ending cash balance?

Answer 1

$31,000

Step-by-step explanation:

The computation of the borrowed amount is shown below:

= Beginning cash balance + expected cash receipts - expected cash disbursements - minimum monthly cash balance

= $43,000 + $97,000 - $126,000 - $45,000

= $31,000

Simply we add the expected cash receipts and less the expected cash disbursements and minimum monthly cash balance to the beginning cash balance so that accurate value can come.