Question

Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $38,200. Cash receipts are expected to be $650,000 and cash payments for purchases are expected to be $613,000. Other cash expenses expected are $27,900 selling and $34,400 general and administrative. The company desires a minimum cash balance at the end of each month of $39,000. If necessary, the company borrows enough cash to meet the minimum using a short-term note. The amount Webster must borrow during April is:

Answer 1

Answer:

$26,100

Explanation:

                                                                                $

Opening Cash Balance                                     $38,200

Cash Receipts (Inflows)                                    $650,000

Cash Payments  

Purchases                                                         $(613,000)

Selling Expenses                                              $(27,900)

G & A Expense                                                  $(34,400)

Cash Balance                                                     $12,900

Desired Cash Balance                                       $39,000

Cash Deficit                                                        $26,100

The cash deficit must be funded by borrowings

Answer 2

Answer:

$ 26,100

Explanation:

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