Freet Inc. is preparing its cash budget for November. The budgeted beginning cas

Question

Freet Inc. is preparing its cash budget for November. The budgeted beginning cash balance is $20,000. Budgeted cash receipts total $111,000 and budgeted cash disbursements total $92,000. The desired ending cash balance is $50,000. The company can borrow up to $80,000 at any time from a local bank, with interest not due until the following month.

Required: Prepare the company's cash budget for November in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance. (Input all amounts as positive values. Omit the "$" sign in your response.)

Cash balance, beginning $

Add cash receipts

Total cash available

Less cash disbursement

Excess (deficiency) of cash available over disbursements

Borrowings

Cash balance, ending $

Explanation / Answer

Cash Budget for November:

Financing:

$ Beginning cash balance 20,000 Budgeted cash receipts 111,000 Total cash available 131,000 Budgeted cash disbursements 92,000 Surplus/ ( Deficiency) 39,000

Financing:

Borrowings 11,000 Repayment Interest Total financing 11,000 Ending cash balance 50,000

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