The following information was taken from Hurlbert Company cash budget for the month June $\begin{array}{lr}
\text { Beginning cash balance } & \$ 46,000 \
\text { Cash receipts } & 62,000 \
\text { Cash disbursements } & 78,000
\end{array}$ If the company has a policy of maintaining end of the month cash balance of $40,000, the amount the company would have to borrow is
A) $24,000.
B) $10,000.
C) $16,000.
D) $0.

Question

Quizplus · Accepted Answer

The ending cash balance without borrowing would be $46,000 (beginning balance) + $62,000 (receipts) - $78,000 (disbursements) = $30,000. To maintain a $40,000 balance, the company needs to borrow $10,000.

The Following Information Was Taken from Hurlbert Company Cash Budget