Question

Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $19,400. Budgeted cash receipts total $190,000 and budgeted cash disbursements total $190,800. The desired ending cash balance is $31,400.

To attain its desired ending cash balance for January, the company should borrow:

Multiple Choice

• $50,000

• $31,400

• $0

• $12,800

Answer 1

Solution :

To attain its desired ending cash balance for January, the company should borrow = $ 12,800

The solution is Option 4 = $ 12,800

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

01.11.2019 - Microsoft FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW F Statement showing calculation of amount to be borrowed for desired ending cash balance of January Sl.No. Particulars Amount 1 Budgeted beginning cash balance $ 19,400.00 2 Add : Budgeted cash receipts $ 190,000.00 3 Less : Budgeted cash disbursements $ -190,800.00 4 Actual ending cash balance =SUM(D4:06) $ 18,600.00 5 The desired ending cash balance $ 31,400.00 6 Amount to be borrowed = (5) - (4) = $ 31,400 - $ 18,600 $ 12,800.00