The owner of Chump Change Inc. has requested a cash budget for June. After examining the records of the company, you find the following: a. Cash balance at June 1 is $736 b.Actual sales for April and May are as follows: AprilMay Cash sales$10,000$18,000 Credit sales28,90035,000 Total sales$38,900$53,000 c.Credit sales are collected over a three-month period: 40 percent in the month of sale, 35 percent in the second month, and 25 percent in the third month. d.Inventory purchases average 70% of a month's total sales. Of those purchases, 20 percent are paid for in the month of purchase. The remaining 80 percent are paid for in the following month. e. Salaries and wages total $11,750 per month, including $4,500 salary paid to the owner. f.Rent is $4,100 per month g.Taxes to be paid in June are $6,780. h.Depreciation of $2,000 was recorded on the equipment The owner expects cash sales of $18,600 and credit sales of $54,000 for June. The owner requires a minimum cash balance of $5,000. The owner has access to a line of credit where up to $10,000 can be withdrawn.

So,

Q1. The expected cash payments in June for purchases made in April is

a) $10,164

b) $29,680

c) $39,844

d) $0

Q2. The expected excess/(deficiency) for June is

a) $5,643

b) $7,063

c) -$2,063

d) -$4,063

Q3. The expected borrowing for June is

a) $7063

b) $9063

c) $5000

d) $0