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30 November, 23:36

Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $40,000. Budgeted cash receipts total $121,000 and budgeted cash disbursements total $115,000. The desired ending cash balance is $61,500. To attain its desired ending cash balance for March, the company needs to borrow:

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  1. 30 November, 23:51
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    Cash borrow = $15,500.

    Explanation:

    Given,

    The company budgeted ending cash balance is $61,500.

    We know,

    Budgeted ending cash balance = Budgeted beginning cash balance + Budgeted cash receipts - Budgeted cash disbursements + Budgeted cash borrow

    Given,

    Budgeted ending cash balance = $61,500.

    Budgeted beginning cash balance = $40,000.

    Budgeted cash receipts = $121,000

    Budgeted cash disbursements = $115,000.

    Budgeted cash borrow = ?

    Putting the values into the formula, we can get

    $61,500 = $40,000 + $121,000 - $115,000 + Cash borrow

    Or, $61,500 - ($40,000 + $121,000 - $115,000) = Cash borrow

    Or, $61,500 - $40,000 - $121,000 + $115,000 = Cash borrow

    Or, $176,500 - $161,000

    Or, $15,500 = Cash borrow

    Or, Cash borrow = $15,500.

    Therefore, cash borrow for March is $15,500.
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