Freet Inc. is preparing its cash budget for November. The budgeted beginning cas

Question

Freet Inc. is preparing its cash budget for November. The budgeted beginning cash balance is $23,000. Budgeted cash receipts total $114,000 and budgeted cash disbursements total $89,000. The desired ending cash balance is $65,000. The company can borrow up to $110,000 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

Particulars Amount($)

Cash balance , beginning 23000

add: cash receipts 114000

total cash available 137000

less: cash disbursements 89000

Excess of cash available over disbursements 48000

borrowings 110000

cash balance ending 158000.

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