Question

Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $26,000. Budgeted cash receipts total $105,000 and budgeted cash disbursements total $94,000. The desired ending cash balance is $70,000. The company can borrow up to $80,000 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
Borrowings
Ending cash balance

Answer 1

Answer:

Calculations below

Explanation:

beginning cash balance $    26,000

Add; Cash receipts         $ 105,000

Total cash available         $ 131,000

Less: Cash disbursments $ (94,000)

Excess (Deficieny) of cash available over disbursments $    37,000

Borrowings ($70,000-$37,000) $    33,000

Ending cash balance $    70,000

Answer 2

Answer:

According with the figures, Zolezzi Inc. will require to borrow $33.000 in March to address the desired closing balance.

Explanation:

Beginning cash balance: 26.000 (March, 1st)

Add cash receipts: 105.000

Total cash available: 131.000

Less cash disbursements: 94.000

Excess (deficiency) of cash available over disbursements: 37.000  

Excess (deficiency) of desired cash balance to the end of March: (33.000)  

Borrowings: 33.000  

Desird ending cash balance: 70.000