Sara, working as a manager in the company, is asked to submit the cash budget for the third quarter of the year. Sara's analysis shows that the third quarter will report an opening cash balance of $7,000, expected cash receipts of $22,000, and expected cash disbursements of $24,500. If the company is required to keep a minimum quarterly cash balance of $8,000, then in order to meet this requirement, the company must borrow
A) $3,500.
B) $4,500.
C) $9,500.
D) $12,500.

Question

Quizplus · Accepted Answer

Required Borrowings = Minimum Quarterly Cash Balance Required F1F1F1S1?F1F1F10 (Beginning Cash Balance + Cash Receipts F1F1F1S1?F1F1F10 Cash Disbursements) = $8,000 F1F1F1S1?F1F1F10 ($7,000 + $22,000 F1F1F1S1?F1F1F10 $24,500) = $3,500.

Sara, Working as a Manager in the Company, Is Asked