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12 March, 19:40

Brockman Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $35,000. Budgeted cash disbursements are $127,000, while budgeted cash receipts are $126,000. Brockman Company wants to have an ending cash balance of $50,000. How much would Brockman Company need to borrow to achieve its desired ending cash balance?

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  1. 12 March, 19:55
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    Required loan = $16000

    Explanation:

    given data

    beginning cash balance = $35,000

    cash disbursements = $127,000

    cash receipts = $126,000

    ending cash balance wants = $50,000

    to find out

    How much would Brockman Company need to borrow

    solution

    we get here Ending cash balance that is express as

    Ending cash balance = beginning cash balance + cash receipts - Cash disbursement ... 1

    put here value we get

    Ending cash balance = $35000 + $126000 - $127000

    Ending cash balance = $34000

    and required loan to borrow will be here as

    required loan = ending cash balance wants - Ending cash balance ... 2

    put here value we get

    Required borrow = $50000 - $34000

    Required loan = $16000
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