Question

25. During September, the capital expenditure budget indicates a $280,000 purchase of equipment. The September cash balance (Net Cash) from Operations is budgeted to be $40,000 before considering the capital expenditure purchase. The company wants to maintain a minimum cash balance (ED) of $20,000 What is the minimum cash loan that must be planned to be borrowed from the bank during September A) $220,000 B) $240,000 C) $260,000 D) $300,000 26. On January 1, Old Lao Shu Bruce Company has a beginning cash balance of 584,000. During the year, the company expects cash disbursements of $680,000 and cash receipts of $580,000. If Old Lao Shu Bruce Company requires an ending cash balance of $80,000, then this Old Lao Shu must borrow A) $64.000. B) $80,000 C) $96,000 D) $184,000 27. On January 1, Xiao Miao Inc has a beginning cash balance of $21,000. During the year, the company expects cash disbursements of $170,000 and cash receipts of $145,000. If Xiao Miao Inc requires an ending cash balance of $20,000, the company must borrow A) $16,000. B) $20,000. C) $24,000. D) $46,000. 28. The following information was taken from the Most Brilliant Professor Mullen Company's cash budget fo the month of July: Beginning cash balance (BI) S300.000 Cash receipts (CRJ) 190,000 Cash disbursements (CDJ) 340,000 If the company has a policy of maintaining a minimum end of the month cash balance of $250,000, the amount the company would have to borrow is A) S100,000. B) $50,000 C) $150,000 D) $60,000

Answer 1

Solution 25)
Capital Exp.	280000
Cash Balance	40000
Cash required	240000
Desired cash balance	20000
Borrow Amount	260000
Solution 26)
Cash Balance	84000
Expected Cash Receipts	580000
Expected Cash Disbursements	-680000
Avaiable Cash	-16000
Desired cash balance	80000
Borrow Amount	96000
Solution 27)
Cash Balance	21000
Expected Cash Receipts	145000
Expected Cash Disbursements	-170000
Avaiable Cash	-4000
Desired cash balance	20000
Borrow Amount	24000
Solution 28)
Cash Balance	300000
Expected Cash Receipts	190000
Expected Cash Disbursements	-340000
Avaiable Cash	150000
Desired cash balance	250000
Borrow Amount	100000