Question

1. G3 Company’s cash budget for March shows cash available of $60,000 and cash payments of $83,200. The firm can only borrow in $1,000 increments and must maintain a minimum cash balance of $10,000. Budgeted borrowing for March will be:

   		$24,000
   		$34,000
   		$94,000
   		$10,000

Answer 1

Answer:$34,000

Working:

Cash Budget (March)
Cash Available	$     60,000
Less: Cash payments	83,200
Surplus/(Deficit)	(23,200)
Barrowings	34,000
Ending cash balance	10,000

Note:

To cover deficiency and ending minimum balance requirement 23,200+10,000=$33,200 we should barrow 34,000 because loan is available in 1,000 increments