Question

The following information was taken from Southgate Industry's cash budget for the month of July: Beginning cash balance $480,000 Cash receipts 304,000 Cash disbursements 544,000 If the company has a policy of maintaining a minimum end of the month cash balance of $400,000, the amount the company would have to borrow is

Answer 1

the amount that the company have to borrow is $160,000

Step-by-step explanation:

The computation of the amount that the company have to borrow is given below:

= Minimum cash balance at end of the month - (beginning cahs balance + cash receipts - cash disbursement)

= $400000 - $(480000+304000-544000)

= $160,000

hence, the amount that the company have to borrow is $160,000