Lois Braggs owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in the cash account as of May 31 is $50,000. Budgeted sales for June are $310,000. Ms. Braggs is required to pay her suppliers on the last day of each month; cash payments for June are expected to be $350,000. Ms. Braggs has a line of credit that enables the restaurant to borrow funds on demand; however, they may only be borrowed on the last day of the month. In other words, she must borrow funds needed during June on May 31. Ms. Bragg desires to maintain a $20,000 cash balance in her account. Required: Compute the amount of funds Ms. Bragg needs to borrow for June. Numeric Response
Lois Braggs owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the month of June. The balance in the cash account as of May 31 is $50,000. Budgeted sales for June are $310,000. Ms. Braggs is required to pay her suppliers on the last day of each month; cash payments for June are expected to be $350,000. Ms. Braggs has a line of credit that enables the restaurant to borrow funds on demand; however, they may only be borrowed on the last day of the month. In other words, she must borrow funds needed during June on May 31. Ms. Bragg desires to maintain a $20,000 cash balance in her account. Required: Compute the amount of funds Ms. Bragg needs to borrow for June. Numeric Response
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lois Braggs owns a small restaurant in Boston. Ms. Bragg provided her accountant with the following summary information regarding expectations for the
month of June. The balance in the cash account as of May 31 is $50,000. Budgeted sales for June are $310,000. Ms. Braggs is required to pay her
suppliers on the last day of each month; cash payments for June are expected to be $350,000. Ms. Braggs has a line of credit that enables the
restaurant to borrow funds on demand; however, they may only be borrowed on the last day of the month. In other words, she must borrow funds
needed during June on May 31. Ms. Bragg desires to maintain a $20,000 cash balance in her account.
Required:
Compute the amount of funds Ms. Bragg needs to borrow for June.
Numeric Response
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