28) O'Brien Company has the following information: Cash Balance, June 30 $50,000 Dividends paid in July 60,000 Cash paid for operating expenses in July 185,500 Depreciation expense in July 12,000 Cash collections on sales in July 510,000 Merchandise purchases paid in July 180,000 Purchase equipment for cash in July 94,500 O'Brien Company wants to maintain a minimum cash balance of $50,000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. Interest of 1% per month is paid in cash at the end of each month debt is outstanding. Borrowing and repayment is carried out in multiples of $1,000. Required: Prepare a cash budget for July. Answer: Beginning cash balance $50,000 Minimum cash balance desired 50,000 Available cash balance $0 Cash receipts and disbursements: Collections from customers $510,000 Payments for merchandise (180,000) Payments for operating expenses (185,500) Dividends paid (60,000) Purchase equipment for cash (94,500) Net cash receipts and disbursements (10,000) Deficiency of cash before financing $(10,000) Borrowing(at beginning of month) 11,000 Interest Payment($11,000 x 1%) (110) Total cash increase from financing 10,890 Ending cash balance $50,890

How is the ending balance $50,890?