Question

Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is $16,000.

Budgeted cash receipts total $188,000 and budgeted cash disbursements total $187,000. The desired
ending cash balance is $40,000. The excess (deficiency) of cash available over disbursements for June
will be:
A. $15,000
B. $1,000
C. $17,000
D. $204,000

Answer 1

The excess of cash available over disbursements for June is found by adding the beginning cash balance to budgeted cash receipts and subtracting cash disbursements. The calculation reveals a cash excess of $17,000 for Mosbey Inc., which makes option C the correct answer.

Step-by-step explanation:

The question is asking to determine the excess (deficiency) of cash available over disbursements for June at Mosbey Inc. This involves computing the available cash at the end of June by adding the budgeted beginning cash balance to the budgeted cash receipts and then subtracting the budgeted cash disbursements.

To calculate the excess or deficiency, we use the formula:

Ending Cash Balance = Beginning Cash Balance + Budgeted Cash Receipts - Budgeted Cash Disbursements

In this scenario:

• Beginning Cash Balance = $16,000
• Budgeted Cash Receipts = $188,000
• Budgeted Cash Disbursements = $187,000

Calculating the Ending Cash Balance:

$16,000 + $188,000 - $187,000 = $17,000. Since the desired ending cash balance is $40,000, they have an excess of $17,000. Thus, the correct answer is C. $17,000.