27) Donald Company has the following information: Cash Balance, May 31 $45,000 Dividends paid in June 12,000 Cash paid for operating expenses in June 36,800 Equipment depreciation expense in June 4,500 Patent amortization expense in June 2,000 Cash collections on sales in June 99,000 Merchandise purchases paid in June 56,200 Purchase equipment for cash in June 17,500 Donald Company wants to keep a minimum cash balance of $10,000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. Interest of 1% is paid in cash at the end of each month when debt is outstanding. Borrowing and repayments are carried out in multiples of $1,000. Required: Prepare a cash budget for June. Answer: Beginning cash balance $45,000 Minimum cash balance desired 10,000 Available cash balance $35,000 Cash receipts and disbursements: Collections from customers $99,000 Payments for merchandise (56,200) Payments for operating expenses (36,800) Dividends paid (12,000) Purchase equipment for cash (17,500) Net cash receipts and disbursements (23,500) Excess of cash before financing $11,500 Borrowing 0 Total cash increase from financing 0 Ending cash balance $21,500

How is the ending cash balance 21,500? Thanks.