Answer:
A. Cash borrow = $7,700
Explanation:
Given,
The company must maintain a minimum cash balance of $12,500.
We know,
Ending cash balance = Beginning cash balance + Cash receipts - Cash disbursements + Cash borrow
Given,
Ending cash balance = $12,500
Beginning cash balance = $15,300
Cash receipts = $61,000
Cash disbursements = $71,500
Cash borrow = ?
Putting the values into the formula, we can get
$12,500 = $15,300 + $61,000 - $71,500 + Cash borrow
Or, $12,500 - ($15,300 + $61,000 - $71,500) = Cash borrow
Or, $12,500 - $15,300 - $61,000 + $71,500 = Cash borrow
Or, $84,000 - $76,300 = Cash borrow
Or, $7,700 = Cash borrow
Or, Cash borrow = $7,700.
Therefore, Option A is the answer.
