In: Accounting
Sparks Corporation has a cash balance of $12,900 on April 1. The company must maintain a minimum cash balance of $10,500. During April, expected cash receipts are $57,000. Cash disbursements during the month are expected to total $65,500. Ignoring interest payments, during April the company will need to borrow: |
$4,400
$6,100
$8,500
$10,500
Sparks Corporation has a cash balance of $12,900 on April 1. The company must maintain a minimum cash balance of $10,500. During April, expected cash receipts are $57,000. Cash disbursements during the month are expected to total $65,500. Ignoring interest payments, during April the company will need to borrow: $4,400 $6,100 $8,500 $10,500
A |
Beginning Cash Balance - Apr 1 |
$ 12,900.00 |
B |
Cash receipts |
$ 57,000.00 |
C = A + B |
Total Cash Available |
$ 69,900.00 |
D |
Cash Disbursements |
$ 65,500.00 |
E = C - D |
Excess of Cash available over disbursements |
$ 4,400.00 |
F |
Ending balance desired |
$ 10,500.00 |
G = F - E |
Amount to be borrowed |
$ 6,100.00 = Answer |