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aton WINTraveRSION BACK NEXT URCES Exercise 5-26 Will Benjamin has been working on Sunland Paints cash budget for the coming

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Answer #1

A) Opening balance :$50194

Add : Cash collections: $700000

Less: Cash disbursements:$710790

Available cash : $39404

Minimum balance required :$50000

Shortfall in cash: $10596

Bank borrowings to be made:$11000

B) Interest for 2 months on bank borrowing:

$11000*10%*2/12= $183

Interest to be repaid:$183

Since principal to be repaid in incremental of $500

Excess cash available :$7000-$183=$6817

Principal to be repaid:$6500

(repaid in incremental of $500)

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