Cheyenne Company has budgeted the following information for June: $$\begin{array} { l r }
\text { Cash receipts } & \$ 271,000 \
\text { Begnning cash balance } & 5,000 \
\text { Cash payments } & 280,000 \
\text { Desired ending cash balance } & 25,000
\end{array}$$ 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 amount of interest paid on July 1 would be:
A) $250.
B) $400.
C) $221.
D) $290.

Question

Cheyenne Company has budgeted the following information for June: $$\begin{array} { l r } 
\text { Cash receipts } & \$ 271,000 \
\text { Begnning cash balance } & 5,000 \
\text { Cash payments } & 280,000 \
\text { Desired ending cash balance } & 25,000
\end{array}$$ 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 amount of interest paid on July 1 would be:
A) $250.
B) $400.
C) $221.
D) $290.

Quizplus · Accepted Answer

The Answer of Cheyenne Company has budgeted the following information for June: $$\begin{array} { l r } 
\text { Cash receipts } & \$ 271,000 \
\text { Begnning cash balance } & 5,000 \
\text { Cash payments } & 280,000 \
\text { Desired ending cash balance } & 25,000
\end{array}$$ 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 amount of interest paid on July 1 would be:
A) $250.
B) $400.
C) $221.
D) $290.

Cheyenne Company Has Budgeted the Following Information for June If There Is a Cash Shortage,the Company Borrows Money from