On April 1 Montreal Salsa Dance School had $1,750 in cash, and no receivables or payables.It also had 100 students whose classes finished on April 30.Thirty-five of those students paid their tuition of $500 on time (before April 30).During the month the school incurred the following costs associated with its operations: instructor salaries $25,000, rent $4,000, and $1,000 utilities.If the school's policy of paying all bills in cash at the end of each month is respected, how much does the school have to borrow to pay its bills?

Question

Quizplus · Accepted Answer

At the end of the month, the school has $1,750 + (35 students x $500) = $19,250 in cash.
However, the school incurred $25,000 + $4,000 + $1,000 = $30,000 in costs during the month.
Therefore, the school needs to borrow $30,000 - $19,250 = $10,750 to pay its bills.

On April 1 Montreal Salsa Dance School Had $1,750 in Cash