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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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Answer:

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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