During May of 2019, XYZ Inc had an opening cash balance of $500,000, budgeted cash receipts of $400,000 and budgeted cash disbursements of $450,000. The company wishes to maintain a cash balance of $500,000 at the start of each month. Any surplus cash is promptly repaid to the bank while funds are borrowed at the start of each month to cover any anticipated shortfall. XYZ is subject to an annual interest rate of 6% per year (0.5% per month. How much interest expense did XYZ Inc. incur during May 2019? Select one: a. $150 b. $300 c. $250 d. Nil.
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During May of 2019, XYZ Inc had an opening cash balance of $500,000, budgeted cash receipts of $400,000 and budgeted cash disbursements of $450,000. The company wishes to maintain a cash balance of $500,000 at the start of each month. Any surplus cash is promptly repaid to the bank while funds are borrowed at the start of each month to cover any anticipated shortfall. XYZ is subject to an annual interest rate of 6% per year (0.5% per month. How much interest expense did XYZ Inc. incur during
May 2019?
Select one:
a. $150
b. $300
c. $250
d. Nil.
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- The following information was extracted from NOVO cash budget for July 2019. The following data are as follows: Excess of cash available over disbursements is P700; cash balance as of July 1, 2019 is P 5,000 and a total cash disbursement for July is P22,500. The business can only borrow in round figures of P1,000 amounts. If the business is required to maintain a minimum cash balance of P100,000, how much money should be borrowed in July?Dear Bartleby, I need assistance calculating interest for part b. b. Assume that management of SeaTech Inc. desires to maintain a minimum cash balance of $10,000 at the beginning of each month and has arranged a $50,000 line of credit with a local bank at an interest rate of 10% to ensure the availability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balance would otherwise fall short of the $10,000 minimum balance. Repayments of principal and interest are to occur at the end of the earliest month in which sufficient funds are expected to be available for repayment. (Use 360 days year for calculations.) Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: April May June Sales $ 112,000 $ 136,000 $ 152,000 Cost of goods sold* 76,800 91,200 100,800 Gross profit $ 35,200 $ 44,800 $ 51,200 Operating expenses† 17,600 20,000 21,600…The controller of Big River Inc. wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending May 31, 2024 April 30, 2024, cash balance Dividends were declared on April 15 Cash expenditures to be paid in May for operating expenses Depreciation expense Cash collections to be received Merchandise purchases to be paid in cash Equipment to be purchased for cash Big River wishes to maintain a minimum cash balance of $122,000 40,000 81,600 12,200 194,000 120,400 45,800 62,000 "Dividends are payable to shareholders of record on declaration date, 30 days after declaration Required: 1. Prepare a cash budget for the month ended May 31, 2024, indicating how much, if anything. Big River will need to borrow to meet its minimum cash requirement. (Leave no cells blank - be certain to enter "0" wherever required.)
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