Question

On January 1, Bonita Industries has a beginning cash balance of $40000. During the year, the company expects cash disbursements of $300000 and cash receipts of $240000. If Bonita requires an ending cash balance of $42000, the company must borrow

Answer 1

company must borrow = $66,000

Step-by-step explanation:

given data

beginning cash balance = $40000

expects cash disbursements = $300000

cash receipts = $240000

ending cash balance = $42000

to find out

company must borrow

solution

first we get here Ending Balance that will be as

Ending Balance = beginning cash balance + cash receipts - expects cash disbursements ..................1

put here value we get

Ending Balance = $40000 + $240000 - $300000

Ending Balance = -$24000

so company must borrow = $42,000 + $24,000

company must borrow = $66,000