Smith Corporation is preparing its cash budget for October. The budgeted beginni

Question

Smith Corporation is preparing its cash budget for October. The budgeted beginning cash balance is $54,000. Budgeted cash receipts total $127,000 and budgeted cash disbursements total $99,000. The desired ending cash balance is $100,000. The company can borrow up to $150,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for October in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance

Explanation / Answer

Particulars Amount (in$) Balance CASH INFLOW Opening balance 54000 Receipts 127000 Borrowings from bank 18000 A 199000 CASH OUTFLOW Cash disbursements 99000 B 99000 Closing Balance A-B 100000

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