The following information was taken from Mitchell Company cash budget for the month of July: $\begin{array}{lr}
\text { Beginning cash balance } & \$ 125,000 \
\text { Cash receipts } & 120,000 \
\text { Cash disbursements } & 170,000
\end{array}$ If the company has a policy of maintaining an end of the month cash balance of $125,000, the amount the company would have to borrow is

Question

Quizplus · Accepted Answer

The company needs to maintain an ending cash balance of $125,000. The beginning cash balance is $125,000, and the cash receipts are $120,000. The cash disbursements are $170,000. So, the company needs to borrow $170,000 - $125,000 - $120,000 = $25,000.

The Following Information Was Taken from Mitchell Company Cash Budget