ezto. 7 Quiz For Marks t The controller of Arrowroot Company wishes to improve t

Question

ezto. 7 Quiz For Marks t The controller of Arrowroot Company wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 20x5 Jue 30, 20X5, cash balance Dividends to be declared on July 15 Cash expendftures to be peid in July for operating expenses Cash collections to be receivecd Merchandise purchases to be paid in cash Equipment to be purchased for cash Arrowroot Compary wishes to maintain a minimum cash balanoe of $122,000 40,000 81,600 12,200 194,000 120,400 45,800 62,000 Dividends are payable to shareholders of record on declaration date, 30 days after declaration. 1. Prepare a cash budget for the month ended July 31, 200X5, indicating how much, if Armowroot to enter wil need to borrow to meet its minimum cash requirement. (Leave no cells blank be wherever required.) ARROWROOT COMPANY for July 20X5 Total cash avalable before current financing Deduct Disbursements Total disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Interest Total financing

Explanation / Answer

Prepare cash budget :

Beginning balance 122000 Add: Cash received from customer 194000 Total cash available before current financing 316000 Deduct : Disbursement Merchandise purchase 120400 Operating expenses 81600 Equipment purchase 45800 Total disbursement 247800 Excess (deficiency) of cash available over disbursement 68200 Financing Borrowing 0 Repayment 0 Interest 0 Total financing 0 Ending cash balance 68200

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