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

Question

Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $18,000. Budgeted cash receipts total $109,000 and budgeted cash disbursements total $94,000. The desired ending cash balance is $55,000. The company can borrow up to $60,000 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.

Beginning cash balance Add cash receipts Total cash available Less cash disbursements Excess (deficiency) of cash available over disbursements Borowings Ending cash balance

Explanation / Answer

Particulars $ Beginning cash balance 18,000 Add Cash balance 109000 Total cash available (18000+109000) 127000 Less Cash Disbursement 94000 Excess (Deficiency) of cash available over disbursements 33000 Borrowings (55000-33000) 22000 Ending cash balance 55000

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