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Cash flow




38) The treasurer for Brookdale Clothing must decide how much money the company needs to borrow in July. The balance sheet for June 30, 2004 is presented below;Brookdale Clothing Balance Sheet;June 30, 2004;Cash $75,000 Accounts payable $400,000;Marketable securities 100,000 Long-term debt 300,000;Accounts receivable 300,000 Common stock 100,000;Inventory 250,000 Retained earnings 200,000;Total current assets 725,000 Total liabilities and;Fixed assets 275,000 stockholder's equity $1,000,000;Total assets $1,000,000;The company expects sales of $250,000 for July. The company has observed that 25% of its sales is for cash and that the remaining 75% is collected in the following month. The company plans to purchase $400,000 of new clothing. Usually 40% of purchases is for cash and the remaining 60% of purchases is paid in the following month. Salaries are $100,000 per month, lease payments are $50,000 per month, and depreciation charges are $20,000 per month. The company plans to purchase a new building for $200,000 in July and sell its marketable securities for $100,000. If the company must maintain a minimum cash balance of $50,000, how much money must the company borrow in July?


Paper#77661 | Written in 18-Jul-2015

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