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Great Skot expects to have cash receipts in June of $532,160. Skot’s cash disbursements in June...

Great Skot expects to have cash receipts in June of $532,160. Skot’s cash disbursements in June are $581,720, including an interest payment on a bond issue of $32,000. If Skot wishes to maintain a cash balance of $40,000, how much will Skot have to borrow if it started the month with a cash balance of $52,000?

$37,560
Surplus of $2,440. Will not have to borrow
$5,560
Surplus of $34,440. Will not have to borrow
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Answer #1

Ending cash balance = Beginning cash balance+recepits-disbursements

=52000+532160-581720

=2440

Skot wants to maintain a balance of $40,000

Hence he has to borrow: 40,000-2,440 = $37,560

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