Question

Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is $16,000. Budgeted cash receipts total $177,000 and budgeted cash disbursements total $176,000. The desired ending cash balance is $45,000. The excess (deficiency) of cash available over disbursements for June will be:

Answer 1

Answer:

There is $28,000 deficiency in desired cash.

Explanation:

Cash Balance is the sum of Beginning cash poistion and net of all cash inflows and outflows during the period.

Beginning Cashflow = $16,000

Net Cash flow during the year = Cash Receipts - Cash disbursements = $177,000 - $176,000 = $1,000

Cash Balance = $16,000 + $1,000 = $17,000

Desired Balance  = $45,000

Over disbursements of cash = $45,000 - $17,000 = $28,000