Sparks Corporation has a cash balance of $12,900 on April 1. The company must maintain a...

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

Expert Solution

All working forms part of the answer
NOTE: Same question got posted twice.
Working

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

Correct Answer = Option #2: $ 6,100

ekkarill92 answered 1 year ago

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