Impatiens Co. is preparing a cash budget for April. The company had $12,000 of cash at the

Question:

Impatiens Co. is preparing a cash budget for April. The company had $12,000 of cash at the beginning of April and anticipates $30,000 in cash receipts and $34,000 in cash disbursements during April. Impatiens has an agreement with its bank to maintain a cash balance of at least $10,000. As of March 31, Impatiens owed $15,000 to the bank.

Impatiens' cash budget for April will show that, in April, Impatiens expects to:

A. Borrow $4,500 from the bank.

B. Borrow $2,500 from the bank.

C. Repay $7,500 to the bank.

D. Repay $6,500 to the bank.

Cash Budget
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment. Its primary purpose is to provide the...