Webber Company is preparing its cash budget for the upcoming quarter. The budget

Question

Webber Company is preparing its cash budget for the upcoming quarter. The budgeted beginning cash balance is expected to be $30,000. Cash Receipts and Disbursements are as follows for each month of the quarter.

Webber wants to maintain a minimum cash balance of $29097 each month of the quarter. How much will they need to borrow at anytime during the quarter (either month 1,2, or 3) in order to maintain that balance?

Explanation / Answer

Cash Budget Month 1 Month 2 Month 3 A Opening Cash $30,000 $31,000 $29,097 B Inflows Cash Receipts $10,000 $11,000 $12,000 Borrowings $2,364 Total $10,000 $13,364 $12,000 C Disbursements $9,000 $15,267 $8,194 D Closing Cash (A+B-C) $31,000 $29,097 $32,903 In order to maintain the minimum cash balance an amount $2364 need to borrow in Month 2

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