Wehr Inc. is preparing its cash budget for April. The budgeted beginning cash ba

Question

Wehr Inc. is preparing its cash budget for April. The budgeted beginning cash balance is $19,000. Budgeted cash receipts total $105,000 and budgeted cash disbursements total $98,000. The desired ending cash balance is $50,000. The company can borrow up to $120,000 at any time from a local bank, with interest not due until the following month.

Required: Prepare the company's cash budget for April in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

Explanation / Answer

Schedule of cash Budget Amount in Dollars Opening Cash Balance A 19,000 Cash Receipt B 1,05,000 Cash disbursement C 98,000 Borrowing (Balancing Figure) D-(A+B-C) 24,000 Closing Cash Balance D 50,000

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