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Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,100....

Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,100. Cash receipts are expected to be $638,000 and cash payments for purchases are expected to be $605,500. Other cash expenses expected are $26,700 selling and $33,200 general and administrative. The company desires a minimum cash balance at the end of each month of $27,000. If necessary, the company borrows enough cash to meet the minimum cash balance using a short-term note. Webster's preliminary cash balance before loan activity for April is expected to be:

$8,700.

$18,300.

$27,000.

($27,400)

. $68,600.

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Answer #1

Cash balance before loan activity

= Opening balance + total receipts - total disbursements

= 36,100 + 638,000 - (605,500+26,700+33,200)

= 8,700

Option A is the answer

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