FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Vargas Company is preparing a cash budget for April. The company has $27,000 cash at the beginning of April and anticipates $60,000 in cash receipts and $64,500 in cash disbursements during April. Vargas Company has an agreement with its bank to maintain a cash balance of at least $25,000. To maintain the $25,000 required balance, during April the company must:

                       

  1. Borrow $2,500 from the owner.
  2. Borrow $5,000 from the owner.   
  3. Borrow $7,500 from the owner.
  4. Borrow $4,500 from anyone other than the bank or the owner.
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