Einstein Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $10,000. Budgeted cash receipts are $85,000, while budgeted cash disbursements are $66,000. Einstein Company wants to have an ending cash balance of $25,000. The excess (deficiency)of cash available over disbursements for the month would be

Question

Quizplus · Accepted Answer

To find the excess (deficiency) of cash available over disbursements, we need to subtract the budgeted cash disbursements from the budgeted cash receipts and add the beginning cash balance, and then subtract the desired ending cash balance.

Excess (Deficiency) = Beginning cash balance + Budgeted cash receipts - Budgeted cash disbursements - Desired ending cash balance

Excess (Deficiency) = $10,000 + $85,000 - $66,000 - $25,000 = $4,000

Therefore, the excess of cash available over disbursements for the month would be $4,000, which is answer D.

Einstein Company Is Preparing Its Cash Budget for the Upcoming