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Nikitich [7]
3 years ago
14

Zhang Industries is preparing a cash budget for June. The company has $25,000 cash at the beginning of June and anticipates $95,

000 in cash receipts and $111,290 in cash disbursements during June. The company has no loans outstanding on June 1. Compute the amount the company must borrow, if any, to maintain a $20,000 cash balance.
Business
1 answer:
Vaselesa [24]3 years ago
5 0

Answer:

Total borrow is $11,290.

Explanation:

  • Needs of cash are equal to cash at the end plus disbursements minus cash at the beggining minus receipts.
  • Cash at the end 20,000
  • Disbursementes 111,290
  • Cash at the beginning 25,000
  • Receipts 95,000
  • So the equation is:
  • 20,000 + 111,290 -25,000 - 95,000 = 11,290

The explanation is if you have 25,000 at moment 0, you win 95,000 and you expent 111,290, you will need 11,290 more in order to have 20,000 at moment 1.

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