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.

Respuesta :

Answer:

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