Question

Zhang Industries is preparing a cash budget for June. The company has $25,000 cash at the beginning of June and anticipates $95,000 in cash receipts and $111,290 in cash disbursements during June. The company has no loans outstanding on June 1. Compute the amount the company must borrow, if any, to maintain a $20,000 cash balance. Multiple Choice $11,290. $28,710. $12,290. $6,290. $16,290.

Answer 1

$11,290

Step-by-step explanation:

The computation of the amount that should be borrowed is given below:

Opening cash balance $25,000.00

Add Cash Receipts 95,000.00

Less Cash Disbursements (111,290.00)

Balance before adjustment 8,710.00

Desired ending cash balance 20,000.00

Amount to be borrowed 11,290.00

Hence, the first option is correct