Asked by Charles Myles on Jun 14, 2024
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Zolezzi Incorporated is preparing its cash budget for March. The budgeted beginning cash balance is $30,000. Budgeted cash receipts total $101,000 and budgeted cash disbursements total $90,000. The desired ending cash balance is $85,000. The company can borrow up to $60,000 at any time from a local bank, with interest not due until the following month.Required:Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.
Cash Budget
A financial plan that estimates cash inflows and outflows over a specific period, used for managing liquidity and ensuring a company can meet its obligations.
Budgeted Cash Receipts
An estimation of the cash a company expects to receive within a certain period, based on projected sales or revenue.
Budgeted Cash Disbursements
An estimate of the total amount of cash an organization plans to pay out over a specified period, including operating expenses and purchase of assets.
- Determine cash revenues and expenditures to devise a plan for cash budgeting.
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Learning Objectives
- Determine cash revenues and expenditures to devise a plan for cash budgeting.
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