Answer:
The cash, if any, must be borrowed to maintain the desired minimum monthly balance is $19,100 (given in the question) and the borrowed amount to maintain the desired minimum monthly balance is $9,000.
Explanation:
The steps for computing the borrowed amount to maintain the desired minimum monthly balance is shown below:
Step 1 : Write Beginning Cash balance
Step 2 : Add Cash receipts
Step 3 : Less Cash disbursements
Step 4 : After cash disbursements is calculated
Step 5: Write minimum monthly cash balance
Step 6: Now, deduct Step 4 amount by Step 5 amount to calculate borrowed amount.
So,
After Cash disbursement = Beginning Cash balance + Cash receipts - Cash disbursements
= $22,700 + $245,800 - $257,700
= $10,800
The cash, if any, must be borrowed to maintain the desired minimum monthly balance is $19,100 (given in the question)
And, the borrowed amount to maintain the desired minimum monthly balance = Monthly cash balance - After cash disbursements
= $19,100 - $10,800
= $9,000
Thus, the cash, if any, must be borrowed to maintain the desired minimum monthly balance is $19,100 (given in the question) and the borrowed amount to maintain the desired minimum monthly balance is $9,000.
