Question

Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month.

Prepare the company's cash budget for November in good form.

Answer 1

See below

Step-by-step explanation:

ENCISCO Corporation.

Cash budget as of November

Beginning cash balance

$31,000

Add:

Budgeted cash receipt

$135,000

Total cash available for use

$166,000

Less

Cash disbursements

($141,000)

Cash surplus

$25,000

Financing:

Borrowing

$25,000

Budgeted ending cash balance

$50,000

Therefore, the company's budgeted cash surplus for November is $25,000. Also, ENCISCO Corporation should borrow $25,000 in order to achieve budgeted cash balance of $50,000