Batista Company management wants to maintain a minimum monthly cash balance of $19,100. At the beginning of April, the cash balance is $22,700, expected cash receipts for April are $245,800, and cash disbursements are expected to be $257,700. How much cash, if any, must be borrowed to maintain the desired minimum monthly balance? Amount to be borrowed to maintain the desired minimum monthly balance

The cash, if any, must be borrowed to maintain the desired minimum monthly balance is $19,100 (given in the question) and the borrowed amount to maintain the desired minimum monthly balance is $9,000.

Explanation:

The steps for computing the borrowed amount to maintain the desired minimum monthly balance is shown below:

Step 1 : Write Beginning Cash balance

Step 2 : Add Cash receipts

Step 3 : Less Cash disbursements

Step 4 : After cash disbursements is calculated

Step 5: Write minimum monthly cash balance

Step 6: Now, deduct Step 4 amount by Step 5 amount to calculate borrowed amount.

So,

After Cash disbursement = Beginning Cash balance + Cash receipts - Cash disbursements

= $22,700 + $245,800 - $257,700

= $10,800

The cash, if any, must be borrowed to maintain the desired minimum monthly balance is $19,100 (given in the question)

And, the borrowed amount to maintain the desired minimum monthly balance = Monthly cash balance - After cash disbursements

= $19,100 - $10,800

= $9,000

Thus, the cash, if any, must be borrowed to maintain the desired minimum monthly balance is $19,100 (given in the question) and the borrowed amount to maintain the desired minimum monthly balance is $9,000.