Question

Cullumber Company has the following cash budget information available for the month of August:

Beginning cash balance		$123,000
Cash receipts from sales and collections on account		122,000
Collection of note receivable and interest		8,300
Cash disbursements for operating expenses		97,000

If the company has a policy of maintaining an end of the month cash balance of $113,000, determine the amount the company would have to borrow or the amount of excess cash it will have to invest in August.

The company would have to invest

$

Answer 1

Beginning cash balance		$123,000
Cash receipts from sales and collections on account		122,000
Collection of note receivable and interest		8,300
Total available cash		253,300
Cash disbursements for operating expenses		- 97,000
End of the month cash balance		- 113,000
Excess cash available for investment	$	43,300

The company would have to invest = $43,300

Kindly give a positive rating if you are satisfied with the answer. Feel free to ask if you have any doubt. Thanks.