Rogers Corporation is preparing its cash budget for July. The budgeted beginning cash balance is $25,000. Budgeted cash receipts total $141,000 and budgeted cash disbursements total $139,000. The desired ending cash balance is $30,000. To attain its desired ending cash balance for July, the company should borrow:

Question

Quizplus · Accepted Answer

To calculate the required borrowing, we need to use the formula: 
Required Borrowing = Desired Ending Cash Balance - (Beginning Cash Balance + Cash Receipts - Cash Disbursements) 
Plugging in the values, we get: 
Required Borrowing = $30,000 - ($25,000 + $141,000 - $139,000) 
Required Borrowing = $30,000 - $25,000 - $2,000 
Required Borrowing = $3,000

Therefore, the best choice is answer choice C, which indicates that Rogers Corporation should borrow $3,000 to attain its desired ending cash balance for July.

Rogers Corporation Is Preparing Its Cash Budget for July