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NikAS [45]
3 years ago
9

Stern Corporation's management wants to maintain a minimum monthly cash balance of $8,000. At the beginning of September, the ca

sh balance is $12,270, expected cash receipts for September are $97,200, and cash disbursements are expected to be $115,000. How much cash, if any, must Stern borrow to maintain the desired minimum monthly balance? Determine your answer by using the basic form of the cash budget.
Business
1 answer:
krek1111 [17]3 years ago
7 0

Answer:

Stern must borrow 13,530dollars at least to achieve is minimum monthly cash balance.

Explanation:

beginning cash balance:             $  12, 270

cash receipts                               $  97,200

cash disbursements              <u>      $(115,000)   </u>

cash balance before financing:  $   (5,530)

minimun balance required          $    8,000

financing requirement: 8,000 - (-5,530) = 8,000 + 5,530 = 13,530

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