Laurey Inc. is working on its cash budget for May. The budgeted beginning cash b

Question

Laurey Inc. is working on its cash budget for May. The budgeted beginning cash balance is $49,000. Budgeted cash receipts total $133,000 and budgeted cash disbursements total $128,000. The desired ending cash balance is $68,000. To attain its desired ending cash balance for May, the company needs to borrow:

$122,000

$0

$68,000

$14,000

Laurey Inc. is working on its cash budget for May. The budgeted beginning cash balance is $49,000. Budgeted cash receipts total $133,000 and budgeted cash disbursements total $128,000. The desired ending cash balance is $68,000. To attain its desired ending cash balance for May, the company needs to borrow:

Explanation / Answer

Answer is $ 14,000 as per calculations below:

Laurey Inc. Cash Budget for May A Beginning Cash Balance $          49,000 Inflows Budgeted Cash receipts $       1,33,000 Borrowings (Workings-1) $          14,000 B Total Inflows $       1,47,000 Outflows C Budgeted cash disbursements $       1,28,000 D Closing Cash Balance(A)+ (B)- (.C) $          68,000 Working Note 1 A Beginning Cash Balance $          49,000 Inflows B Budgeted Cash receipts $       1,33,000 Outflows C Budgeted cash disbursements $       1,28,000 D Closing Cash Balance(A)+ (B)- (.C) $          54,000 E Desired ending Cash Balance $          68,000 F Less Cash balance as above (.E)-(D) $          14,000

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