Al-Nahdha company is preparing its cash budget for the first half of the year 2022. The company records shows that ithas $20,000 in the cash at the start of the period. Cash collections from customers for the period are budgeted at$56,000. Purchases of inventory as budgeted will cost cash payment during the period of $60,000. The Companyintends to keep its cash balance at the end of the period at $10,000. Other operating expenses for this period arebudgeted at $30,000, which includes $2,000 depreciation and any cash expenses are paid in the month incurred. Howmuch borrowing will the company need in the first half of 2022?O a.$12,000O b. $10,000None of the given answersO d. $22,000O e.$20,000

Solution: Al-Nahdha Company Particulars…

Al-Nahdha company is preparing its cash budget for the first half of the year 2022. The company records shows tha nas $20,000 in the cash at the start of the period. Cash collections from customers for the period are budgeted at $56,000. Purchases of inventory as budgeted will cost cash payment during the period of $60,000. The Company ntends to keep its cash balance at the end of the period at $10,000. Other operating expenses for this period are pudgeted at $30,000, which includes $2,000 depreciation and any cash expenses are paid in the month incurred. Ho much borrowing will the company need in the first half of 2022? O a. $12,000 O b. $10,000 O c. None of the given answers O d. $22,000 O e. $20,000

Al-Nahdha company is preparing its cash budget for the first half of the year 2022. The company records shows tha nas $20,000 in the cash at the start of the period. Cash collections from customers for the period are budgeted at $56,000. Purchases of inventory as budgeted will cost cash payment during the period of $60,000. The Company ntends to keep its cash balance at the end of the period at $10,000. Other operating expenses for this period are pudgeted at $30,000, which includes $2,000 depreciation and any cash expenses are paid in the month incurred. Ho much borrowing will the company need in the first half of 2022? O a. $12,000 O b. $10,000 O c. None of the given answers O d. $22,000 O e. $20,000

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 16MC: In an attempt to better understand RR’s cash position, Johnson developed a cash budget for the first...

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