Question

Freet Inc. is preparing its cash budget for November. The budgeted beginning cash balance is $21,000. Budgeted cash receipts total $100,000 and budgeted cash disbursements total $99,000. The desired ending cash balance is $55,000. The company can borrow up to $130,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for November in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance. (Input all amounts as positive values. Omit the "$" sign in your response.)

Cash balance, beginning
Add cash receipts
Total cash available
Less cash disbursement
Excess (deficiency) of cash available over disbursements
Borrowings
Cash balance, ending

Answer 1

Answer and Explanation:

The Preparation of company's cash budget is shown below:-

Beginning cash balance $21,000

Add: Cash receipt $100,000

Total cash available $121,000

Less: Cash disbursement $99,000

Excess of cash available

over disbursement $22,000

Add: Borrowings $33,000

Cash balance, ending $55,000