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 Marketable securities 100,000 Accounts receivable 300,000 Inventory 250,000 Total current assets 725,000 275,000 $1,000,000 Fixed assets Total assets Cash Inflows Reduction in Cash Sale of Marketable securities Collection of accounts receivable Cash Sales (25) ($250,000) Total cash inflows Cash Outflows Repayment of accounts payable Cash Purchase Salaries Accounts payable Long-term debt Lease Payments Purchase of building Total cash outflows Net inflow (outflow) The company needs to borrow Common stock Retained earnings 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? $400,000 300,000 Total liabilities and stockholder's equity $1,000,000 100,000 200,000 Brookdale Clothing Cash Budget for July 2004 $25,000 100,000 300,000 62,500 $487,500 $400,000 160,000 100,000 50,000 200,000 $910,000 ($487,500) $422,500