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 excess or deficiency, we need to find the total cash available (beginning balance plus cash receipts) and subtract the total cash disbursements and the desired ending cash balance.

Total cash available = $12,000 + $84,000 = $96,000 
Total cash disbursements = $72,000 
Desired ending cash balance = $40,000

Excess or deficiency = Total cash available - Total cash disbursements - Desired ending cash balance 
= $96,000 - $72,000 - $40,000 
= $24,000

Therefore, the excess of cash available over disbursements for the month would be $24,000.

Newton Company Is Preparing Its Cash Budget for the Upcoming