Question

The beginning cash balance is $8000, estimated cash receipts are $108,000, and estimated cash payments are $110,000.

How much cash must be borrowed to have a desired ending balance of $9,000?

Answer 1

To have a desired ending balance of $9,000, $3,000 must be borrowed.

Step-by-step explanation:

To calculate the amount of cash that must be borrowed to have a desired ending balance of $9,000, we need to consider the beginning cash balance, estimated cash receipts, and estimated cash payments. The formula to calculate the amount of cash to be borrowed is:

Cash to be borrowed = Desired ending balance - (Beginning cash balance + Estimated cash receipts - Estimated cash payments)

Plugging in the given values, we have:

Cash to be borrowed = $9,000 - ($8,000 + $108,000 - $110,000) = $9,000 - $6,000 = $3,000

Therefore, $3,000 must be borrowed to have a desired ending balance of $9,000.