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Dahasolnce [82]
3 years ago
8

Southland Company is preparing... Southland Company is preparing a cash budget for August. The company has $18,300 cash at the b

eginning of August and anticipates $123,400 in cash receipts and $137,100 in cash disbursements during August. Southland Company wants to maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:
Business
1 answer:
Alekssandra [29.7K]3 years ago
7 0

Answer:

The Company must borrow $5400

Explanation:

To calcualte the amount rewquired to be borrowed, we first need to calculate the cash shortage from the minimum cash requirement.

The cash at the end of the August will be,

Cash at the end = 18300 + 123400 - 137100 = $4600

The minimum requirement is $10000.

The shortage of cash is = 10000 - 4600 = $5400

Thus, the Company must borrow $5400

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