Answered

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Santos Co. is preparing a cash budget for February. The company has $20,000 cash at the beginning of February and anticipates $75,000 in cash receipts and $100,250 in cash payments during February. What amount, if any, must the company borrow during February to maintain a $5,000 cash balance

Sagot :

Zviko

Answer:

$10,250

Explanation:

The Cash Budget for February can be summarized as :

Receipts                                    $75,000

Less Payments                       ($100,250)

Cash movement                      ($25,250)

Beginning Balance                   $20,000

Ending Balance                         ($5,250)

Desired Balance                        $5,000

Amount to be Borrowed          $10,250

The company must borrow $10,250 ($5,000 + $5,250) during February to maintain a $5,000 cash balance.

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