QuestionAugust 16, 2025

Striker Company estimates its expected cash receipts for the period to be 80,000 and its expected cash disbursements to be 70,000 The beginning cash balance for the period was 5,000 The management wants to maintain a minimum cash balance of 40,000 Knowledge Check 01 How much cash will the company need to borrow? 15,000 25,000 30,000 40,000

Striker Company estimates its expected cash receipts for the period to be 80,000 and its expected cash disbursements to be 70,000 The beginning cash balance for the period was 5,000 The management wants to maintain a minimum cash balance of 40,000 Knowledge Check 01 How much cash will the company need to borrow? 15,000 25,000 30,000 40,000
Striker Company estimates its expected cash receipts for the period to be 80,000 and its expected cash disbursements to be
 70,000 The beginning cash balance for the period was 5,000 The management wants to maintain a minimum cash balance of
 40,000
Knowledge Check 01
How much cash will the company need to borrow?
 15,000
 25,000
 30,000
 40,000

Solution
4.1(281 votes)

Answer

\ 25,000 Explanation 1. Calculate Ending Cash Balance Ending cash balance = Beginning cash balance + Expected cash receipts - Expected cash disbursements = 5,000 + 80,000 - 70,000 = 15,000 2. Determine Shortfall Shortfall = Minimum cash balance - Ending cash balance = 40,000 - 15,000 = 25,000

Explanation

1. Calculate Ending Cash Balance<br /> Ending cash balance = Beginning cash balance + Expected cash receipts - Expected cash disbursements = $5,000 + 80,000 - 70,000 = 15,000$<br />2. Determine Shortfall<br /> Shortfall = Minimum cash balance - Ending cash balance = $40,000 - 15,000 = 25,000$
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