Webber Company is preparing its cash budget for the upcoming quarter. The budget
ID: 2503915 • Letter: W
Question
Webber Company is preparing its cash budget for the upcoming quarter. The budgeted beginning cash balance is expeced to be $30,000. Cash Receipts and Disbursements are as follows for each month of the quarter.
Month 1 Month 2 Month 3
Cash receipts 10000 11000 12000
Cash disbursements 9000 14810 8858
Webber wants to maintain a minimum cash balance of $30315 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
The need to borrow $3,125 during the 2nd month.
Month 1
beginning balance
30,000
add receipts
10,000
subtract disbursements
-9,000
ending balance
31,000
No borrowing during 1st month
month 2
beginning balance
31,000
add receipts
11,000
subtract disbursements
-14,810
subtotal
27,190
add borrowing
3,125
ending balance
30,315
Borrowings: 3,125
Month 3
beginning balance
30,315
add receipts
12000
subtract disbursements
-8858
payback of borrowings
3,125
ending balance
36,582
No borrwing during 3rd month
Month 1
beginning balance
30,000
add receipts
10,000
subtract disbursements
-9,000
ending balance
31,000
No borrowing during 1st month
month 2
beginning balance
31,000
add receipts
11,000
subtract disbursements
-14,810
subtotal
27,190
add borrowing
3,125
ending balance
30,315
Borrowings: 3,125
Month 3
beginning balance
30,315
add receipts
12000
subtract disbursements
-8858
payback of borrowings
3,125
ending balance
36,582
No borrwing during 3rd month
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.