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28 January, 02:55

Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $38,000. Budgeted cash receipts total $119,000 and budgeted cash disbursements total $113,000. The desired ending cash balance is $57,500. To attain its desired ending cash balance for March, the company needs to borrow:

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  1. 28 January, 06:29
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    Bustillo Inc. will borrow $13500

    Explanation:

    Cash budget is calculated using the following step

    Beginning Cash balance $38000

    Add : Cash receipts $119000

    Total Cash Available for use $157000

    Less: Cash Disbursements $113000

    Ending Cash Balance $44000

    Less Desire cash Balance $57500

    Money required to borrow - $13500

    So Bustillo Inc. need to borrow $13500 in order to achieve the target cash balance.
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