Bustillo Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $35,000. Budgeted cash receipts total $142,000 and budgeted cash disbursements total $151,000. The desired ending cash balance is $30,000. To attain its desired ending cash balance for March, the company needs to borrow:

Question

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The company starts with $35,000 and expects to receive $142,000, totaling $177,000. After spending $151,000, it would have $26,000 left, which is $4,000 short of the desired $30,000 ending balance. Therefore, it needs to borrow $4,000.

Bustillo Incorporated Is Working on Its Cash Budget for March