Question
Cheyenne Company has budgeted the following information for June: Cash receipts $ 287,000 Beginning cash balance 9,000 Cash payments 304,000 Desired ending cash balance 29,000
Cheyenne Company has budgeted the following information for June:
| Cash receipts | $ 287,000 |
|---|---|
| Beginning cash balance | 9,000 |
| Cash payments | 304,000 |
| Desired ending cash balance | 29,000 |
If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month.
.
The company had no debt before June 1. The company would have borrowed money on June 1 based on its budgeted needs.
In that case, the amount expected amount of interest to be paid on July 1 would be:
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Auditing Excellence Principles And Practices In Accounting Ensuring Accuracy Transparency And Compliance In Financial Reporting
Authors: Ryan Flores
1st Edition
B0C6448LC8, 979-8395841360
