Asked by Morgan Whittle on Apr 25, 2024
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Zolezzi Incorporated is preparing its cash budget for March. The budgeted beginning cash balance is $42,000. Budgeted cash receipts total $178,000 and budgeted cash disbursements total $175,000. The desired ending cash balance is $50,000. The company can borrow up to $160,000 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, focusing on a company's liquidity and ability to meet short-term obligations.
Budgeted Cash Receipts
Forecasted cash inflows for a certain period, accounting for all expected sources of revenue including sales, investments, and loans.
Budgeted Cash Disbursements
An estimate of all cash payments that a business plans to make over a specific period, including operating expenses and capital expenditures.
- Calculate cash inflows and outflows to formulate a financial plan for cash management.
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Learning Objectives
- Calculate cash inflows and outflows to formulate a financial plan for cash management.
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