Preparing cash budget-maintain minimum cash balance

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Reference no: EM131213266

Western Company is preparing a cash budget for June. The company has $10,800 cash at the beginning of June and anticipates $31,200 in cash receipts and $36,900 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:

Borrow $5,700.

Repay $4,900.

Borrow $10,000.

Repay $5,100.

Borrow $4,900.

Reference no: EM131213266

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