2) Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning c

Question

2) Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $42,000. Budgeted cash receipts total S178,000 and budgeted cash disbursements total S175,000. The desired ending cash balance is $50,000. The company can borrow up to S160,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

Explanation / Answer

Cash balance, beginning $42,000 Add cash receipts $178,000 Total cash available $220,000 Less cash disbursements $175,000 Excess (deficiency) of cash available over disbursements $45,000 Borrowings $5,000 Cash balance, ending $50,000

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