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Western Company is preparing a cash budget for June. The company has $11,000 cash at the...

Western Company is preparing a cash budget for June. The company has $11,000 cash at the beginning of June and anticipates $31,000 in cash receipts and $36,500 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: Borrow $10,000. Borrow $4,500. Repay $5,500. Repay $4,500. Borrow $5,500.

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Answer #1

Cash budget

Beginning balance 11000
Cash receipt 31000
Less; Cash disbursement -36500
Preliminary Balance 5500
Minimum balance 10000
Borrow 4500

So answer is b) Borrow $4500

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