Newton Company is preparing its cash budget for the upcoming month.The beginning cash balance for the month is expected to be $12,000.Budgeted cash receipts are $84,000,while budgeted cash disbursements are $72,000.Newton Company wants to have an ending cash balance of $40,000.The excess (deficiency)of cash available over disbursements for the month would be:

Question

Quizplus · Accepted Answer

To calculate the excess or deficiency of cash available over disbursements, we need to use the formula:
Beginning cash balance + Cash receipts - Cash disbursements = Ending cash balance

Plugging in the given values, we get:
$12,000 + $84,000 - $72,000 = $24,000

Since the ending cash balance is expected to be $40,000 and we have a positive excess of $24,000, it means that Newton Company will have a total of $64,000 in cash by the end of the month ($40,000 + $24,000).

Newton Company Is Preparing Its Cash Budget for the Upcoming