Smith Company has a budgeted beginning cash balance of $11,000 and required minimum cash of $5,000....
Smith Company has a budgeted beginning cash balance of $11,000 and required minimum cash of $5,000. Their budgeted cash flows are below. How much do they need to borrow to maintain their minimum cash balance?
A. $4,000
B. $9,000
C. $14,000
D. $20,000
Payments to suppliers $25,000
Cash dividends paid 5,000
Collections from customers 45,000
Lease payments 10,000
Depreciation expense 5,000
Other cash expenses 20,000
Homework Answers
Answer:
Please note that depreciation expense should not be included in the cash balance as its a non-cash item.
| Particulars | Amount |
| Opening Balance | 11,000 |
| Payments to suppliers | (25,000) |
| Cash dividends paid | (5,000) |
| Collections from customers | 45,000 |
| Lease payments | (10,000) |
| Other cash expenses | (20,000) |
| Closing balance | (4,000) |
The answer is A. $4,000.
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Smith Company has a budgeted beginning cash balance of $11,000
and required minimum cash of $5,000....
Smith Company has a budgeted beginning cash balance of $11,000, and a required minimum cash of...
Smith Company has a budgeted beginning cash balance of $11,000, and a required minimum cash of $5,000. Their budgeted cash flows are below. How much do they need to borrow to maintain their minimum cash balance? A. $4,000 B. $9,000 C. $14,000 D. $20,000 Payments to suppliers Cash dividends paid Collections from customers Lease payments Depreciation expense $25,000 5,000 45,000 10,000 5,000
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C. $5,000
D. $25,000
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