Sparks Corporation has a cash balance of $19,500 on April 1. The company must maintain a minimum cash balance of $16,000. During April, expected cash receipts are $68,000. Cash disbursements during the month are expected to total $82,000. Ignoring interest payments, during April the company will need to borrow:

a. $10,500

b. $5,500

c. $16,000

d. $14,000

Cash borrow = 10500

so correct option is a. $10,500

Explanation:

given data

Ending cash balance = $16,000

Beginning cash balance = $19,500

expected cash receipts = $68,000

Cash disbursements = $82,000

solution

we know that Ending cash balance is express as

Ending cash balance = Beginning cash balance + Cash receipts - Cash disbursements + Cash borrow ... 1

we get here Cash borrow put here value

$16,000 = $19,500 + $68,000 - $82,000 + Cash borrow

solve it we get

Cash borrow = 10500

so correct option is a. $10,500