Bustillo Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $39,000. Budgeted cash receipts total $120,000 and budgeted cash disbursements total $114,000. The desired ending cash balance is $59,500. To attain its desired ending cash balance for March, the company needs to borrow:

Question

Quizplus · Accepted Answer

To calculate the required borrowing, we need to use the following formula:
Required borrowing = Desired ending cash balance - (Beginning cash balance + Cash receipts - Cash disbursements)

Plugging in the numbers, we get:
Required borrowing = $59,500 - ($39,000 + $120,000 - $114,000)
Required borrowing = $14,500

Therefore, the company needs to borrow $14,500 to attain its desired ending cash balance for March.

Bustillo Incorporated Is Working on Its Cash Budget for March