Ask Question
9 December, 08:23

Western Company is preparing a cash budget for June. The company has $10,000 cash at the beginning of June and anticipates $32,000 in cash receipts and $38,500 in cash disbursements during June. Western Company has an agreement with its bank to maintain a minimum cash balance of $10,000. As of May 31, the company owes $15,000 to the bank. To maintain the $10,000 required balance, during June the company must: Multiple Choice Borrow $10,000. Repay $3,500. Borrow $6,800. Borrow $6,500. Repay $6,500.

+5
Answers (1)
  1. 9 December, 09:07
    0
    Borrow $6,500

    Explanation:

    The computation is shown below:

    Cash on Hand on June 1 $10,000

    Add: Anticipates cash receipts $32,000

    Total cash available $42,000

    Less: Anticipates total cash disbursements - $38,500

    Ending cash balance $3,500

    Less: Minimum cash balance - 10,000

    Borrowed amount - $6,500

    Hence, the borrowed amount is $6,500
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Western Company is preparing a cash budget for June. The company has $10,000 cash at the beginning of June and anticipates $32,000 in cash ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers