Walker Corporation is preparing its cash budget for November. The budgeted begin
ID: 2415658 • Letter: W
Question
Walker Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $43,000. Budgeted cash receipts total $117,000 and budgeted cash disbursements total $122,000. The desired ending cash balance is $55,000. 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. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance
Explanation / Answer
Cash budget for November month Amount in $ Cash balance at the begining of the month 43,000 Add: Budgeted cash receipts 1,17,000 Less: Cash Disbursments 1,22,000 Amount of borrowing ( Balancing figure) 17,000 But Cash balance required to be maintain at the end 55,000 Hence amount required to be borrowed to maintain the cash balance of $ 55,000 is $ 17,000(i.e 55,000- 38,000)
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