A) Opening balance :$50194
Add : Cash collections: $700000
Less: Cash disbursements:$710790
Available cash : $39404
Minimum balance required :$50000
Shortfall in cash: $10596
Bank borrowings to be made:$11000
B) Interest for 2 months on bank borrowing:
$11000*10%*2/12= $183
Interest to be repaid:$183
Since principal to be repaid in incremental of $500
Excess cash available :$7000-$183=$6817
Principal to be repaid:$6500
(repaid in incremental of $500)
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