Question

Hedlon company is preparing its cash budget for the upcoming month. the beginning cash balance for the month is expected to be​ $16,000. budgeted cash disbursements are​ $80,000, while budgeted cash receipts are​ $89,000. hedlon company wants to have an ending cash balance of​ $30,000. the excess​ (deficiency) of cash available over disbursements for the month would be question content area bottom part 1

a. ​$25,000
b. ​$(25,000)
c. ​$110,000
d. ​$185,000

Answer 1

The excess (deficiency) of cash available for Hedlon company, without considering the desired ending balance, is $25,000. This figure is derived by subtracting the budgeted disbursements from the sum of the beginning balance and budgeted receipts.

Step-by-step explanation:

The excess (deficiency) of cash available over disbursements for Hedlon company for the upcoming month is calculated as follows:

Beginning cash balance: $16,000Add: Budgeted cash receipts: $89,000Less: Budgeted cash disbursements: $80,000Equals: Ending cash without considering desired ending balance: $25,000

Since the company wants to have an ending cash balance of $30,000, the excess (deficiency) of cash for the month would be:

Excess cash after considering the desired ending balance: $25,000 (calculated above) minus $30,000 (desired ending balance) equals $(5,000).

Excess without considering the desired ending balance, so the answer is $25,000.