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Sparks Corporation has a cash balance of $18,000 on April 1. The company must maintain a minimum cash balance of $10,000. During April, expected cash receipts are $98,000. Cash disbursements during the month are expected to total $112,000. Ignoring interest payments, during April the company will need to borrow:a.$2,000b.$4,000c.$8,000d.$6,000

Respuesta :

Answer:

d.$6,000

Explanation:

The computation of the borrowed amount is shown below:

As we know that

Ending balance of cash = Beginning balance of cash + Cash receipts - Cash disbursements

= $18,000 + $98,000 - $112,000

=  $4,000

Now the borrowed amount is

= Minimum cash balance - ending balance of cash

= $10,000 - $4,000

= $6,000

Hence, the correct option is d.

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