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 April, the company needs to borrow:

Question

Quizplus · Accepted Answer

Based on the projection, the company will have a deficit of $18,000 at the end of April. This means that they need to borrow $18,000 to attain their desired ending cash balance for April. Option B is incorrect because it assumes that the company will have enough cash to cover their expenses for April, which is not the case based on the projection. Option C and D are both incorrect because they assume that the company will have excess cash, which is not the case based on the projection.

Rogers Corporation Is Preparing Its Cash Budget for July