Question

Batista Company management wants to maintain a minimum monthly cash balance of $ 20,800. At the beginning of April, the cash balance is $ 22,900, expected cash receipts for April are $245,900, and cash disbursements are expected to be $ 257,700.

How much cash, if any, must be borrowed to maintain the desired minimum monthly balance?

Amount to be borrowed to maintain the desired minimum monthly balance

$

Answer 1

Working:

Beinning Cash Balance	22,900
Expected Cash Receipts	2,45,900
Expected Cash Disbursements	(2,57,700)
Desired Ending Cash Balance	(20,800)
Amount to be Borrowed	(9,700)

Hence, Batisata Company needs to borrow $9,700.