Problem
The Farley Company wishes to maintain a minimum cash balance of $50,000 at the end of each month. The company borrows money from the bank at 8% interest if necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. The beginning cash balance on July 1 was $50,000, expected cash Receipts for collections from customers are 141,000; cash sales are 255,000 during the month, and cash disbursements for Purchases are 275,000; Selling and administrative expenses are 48,000; and Dividends to stockholder are 103,000.
Task
How much cash, if any, must be borrowed to maintain the desired minimum monthly balance?