What is the amount the company would have to borrow?

The company would need to borrow $160,000 to maintain a minimum end of the month balance of $400,000.To arrive at this conclusion, you will add the cash receipts to the beginning cash balance. So, $480,000 plus $304,000 equals $784,000. Then, you will need to subract the amount of cash disbursements. It will look like this, $784,000 minus $544,000 equals $240,000.

The company has a policy of maintaining a minimum end of the month cash balance of $400,000. To know how much the company would need to borrow, you must find the difference between $240,00 and $400,000. Thus, the amount to borrow would be $160,000.