Question

Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $38,000. Budgeted cash receipts total $119,000 and budgeted cash disbursements total $113,000. The desired ending cash balance is $57,500. To attain its desired ending cash balance for March, the company needs to borrow:

Answer 1

Bustillo Inc. will borrow $13500

Step-by-step explanation:

Cash budget is calculated using the following step

Beginning Cash balance $38000

Add : Cash receipts $119000

Total Cash Available for use $157000

Less: Cash Disbursements $113000

Ending Cash Balance $44000

Less Desire cash Balance $57500

Money required to borrow -$13500

So Bustillo Inc. need to borrow $13500 in order to achieve the target cash balance.