(b) Enciso Corporation is preparing its cash budget for November. The budgeted b

Question

(b) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for November in good form. Show all calculations and present your work in good form. (10 marks)

Explanation / Answer

Enciso Corporation Cash budget For November Beginning cash balance 31000 ADD: cash receipts 135000 Total cash available 166000 LESS: cash disbursements 141000 Excess (Shortage) 25000 borrowings 25000 Ending cash balance 50000 Borrowings = ending cash balance - excess = 50000-25000=25000

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