Question

Becker Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $70,000. Budgeted cash disbursements are $254,000, while budgeted cash receipts are $252,000. Becker Company wants to have an ending cash balance of $100,000. How much would Becker Company need to borrow to achieve its desired ending cash balance

Answer 1

Answer:

$32,000

Explanation:

Calculation to determine How much would Becker Company need to borrow to achieve its desired ending cash balance

Using this formula

Desired ending cash balance=[Ending cash balance-Budgeted beginning cash balance+

(Budgeted cash disbursements-budgeted cash receipts)]

Let plug in the formula

Desired ending cash balance=[$100,000-$70,000+($254,000-$252,000)]

Desired ending cash balance=$30,000+$2,000

Desired ending cash balance=$32,000

Therefore The amount that Becker Company need to borrow to achieve its desired ending cash balance is $32,000