Webster Corporation is preparing its cash budget for April. The March 31 cash ba

Question

Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $40,400. Cash receipts are expected to be $661,000 and cash payments for purchases are expected to be $618,500. Other cash expenses expected are $29,000 selling and $35,500 general and administrative. The company desires a minimum cash balance at the end of each month of $34,000. If necessary, the company borrows enough cash to meet the minimum using a short-term note. The amount Webster must borrow during April is:

Explanation / Answer

Ans $ 15600

(AMOUNT IN $) DESIRED CLOSING BALANCE                 34,000 LESS OPENING CASH BALANCE                 40,400 LESS CASH RECEIPTS              661,000 ADD CASH PAYMENTS              618,500 ADD SELLING EXPENSES                 29,000 ADD GENERAL AND ADMINISTRATIVE EXPENSES                 35,500 AMOUNT TO BE BORROWED                 15,600

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