225k views
4 votes
has $ 8 comma 400 cash on hand on October 1. The company requires a minimum cash balance of $ 7 comma 300. October cash collections are $ 548 comma 310. Total cash payments for October are $ 578 comma 140. Prepare a cash budget for October. How much​ cash, if​ any, will Howard need to borrow by the end of October​?

1 Answer

5 votes

Answer:

Borrowing of $29,040

Step-by-step explanation:

Whether or not Howard needs to borrow at end of October can be ascertained by computing the cash excess or shortfall a shown below:

Opening cash balance $8,400

Cash collections $548,000

Cash available $556,400

Cash payments ($578,140)

Desired cash balance ($7,300)

Cash shortfall ($29,040)

The company has to borrow $29,040 in order to be able to make the desired cash payment and still have the desired cash closing balance of $7,300 at end of October

User Helrich
by
8.8k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories