The controller of Trenshaw Company wants to improve the company\'s control syste

Question

The controller of Trenshaw Company wants to improve the company's control system by preparing a month-by-month cash budget. The following information is for the month ending July 31, 2017. June 30, 2017, cash balance Dividends to be declared on July 15* Cash expenditures to be paid in luly for operating expenses Amortization expense in July Cash collections to be received in July Merchandise purchases to be paid in cash in July Equipment to be purchased for cash in July $45,000 12,900 37,900 4,400 83,700 55,100 20,800 Dividends are payable 30 days after declaration to shareholders of record on the declaration date. Trenshaw Company wants to keep a minimum cash balance of $25,000 Prepare a cash budget for the month ended July 31, 2017, and indicate how much money, if any, Trenshaw Company will need to borrow to meet its minimum cash requirement. IRENSHAW COMPANY Cash Budget

Explanation / Answer

Cash budget Beginning cash balance 45000 Add Cash collection to be received in july 83700 Total cash available for use 128700 Less Payments to be made Merchandise paid in cash 55100 Equipment purchased for cash 20800 Cash for operating expense 37900 Total payments to be made 113800 Net cash balance 14900 Add Amount borrowed 10100 Ending cash balance 25000

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