N Company is preparing a cash budget for June. The company has $12,000 cash at the beginning of June and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during June. Northern Company has an agreement with its bank to maintain a cash balance of at least $10,000. To maintain the $10,000 required balance, during June the company must:

a.

Borrow $10,000

b.

Borrow $7,500

c.

Borrow $2,500

d.

Borrow $4,500