A Company is preparing a cash budget for June The company has $83,750 cash at the beginning ofJune and anticipates $102,930 in cash receipts and $116,870 in cash disbursements during June. Thiscompany has an agreement with its bank to maintain a cash balance of at least $81 250. As of May 31.the company owes $30,000 to the bank To maintain the $81.250 required balance, during June thecompany mustO Borrow $11 440O Repay $13,940O Borrow $30 000Repay $30,000O Repay $11,440

Given: Opening balance = $83,570 Cash receipts = $102,930 Cash disbursements = $116,870 Required…

Answered: A Company is preparing a cash budget…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter $ 210,000 $ 281,000 The company's beginning cash balance for the upcoming fiscal year will be $26,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Required: Prepare the company's cash budget for the upcoming fiscal year.…
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