Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 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:

Question

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The company starts with $17,000 and expects $120,800 in receipts, totaling $137,800. With disbursements of $134,500, the ending cash balance would be $3,300. To maintain a minimum balance of $10,000, they need to borrow $6,700 ($10,000 - $3,300).

Southland Company Is Preparing a Cash Budget for August