32 Walsh Corporation is preparing its cash budget for January. The budgeted begi

Question

32 Walsh Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,000. Budgeted cash receipts total $183,000 and budgeted cash disbursements total $188,000. The desired ending cash balance is $30,000. ut of 3 To attain its desired ending cash balance for January, the company should borrow: Select one: O a. $0 b. $43,000 C. $30,000 d. $17,000 O stion 33 Walsh Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of oneration yet

Explanation / Answer

Answer:

d. $ 17,000

Explanation:

Budgeted Ending cash balance

=Budgeted Beginning cash balance + budgeted cash receipts - budgeted cash payments

= $ 18,000 + $ 183,000 -$ 188,000

=$ 13,000

Desired ending cash balance = $ 30,000

But, budgeted cash balance =$ 13,000

Funds to be borrowed = $30,000 - $ 13,000 = $17,000

So, as budgeted cash balance is $ 17,000 short of desired ending cash balance. The company should borrow $17,000.

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