AlNahdha company is preparing its cash budget for the first half of the year 2022. The company records shows that it has $20,000 in the cash at the start of the period . Cash collections from customers for the period are budgeted at $56,000 . Purchases of inventory as budgeted will cost cash payment during the period of $60,000 . The Company intends to keep its cash balance at the end of the period at $10,000 . Other operating expenses for this period are budgeted at \$30,000 , which includes $4,000 depreciation and any cash expenses are paid in the month incurred . How much borrowing will
AlNahdha company is preparing its cash budget for the first half of the year 2022. The company records shows that it has $20,000 in the cash at the start of the period . Cash collections from customers for the period are budgeted at $56,000 . Purchases of inventory as budgeted will cost cash payment during the period of $60,000 . The Company intends to keep its cash balance at the end of the period at $10,000 . Other operating expenses for this period are budgeted at \$30,000 , which includes $4,000 depreciation and any cash expenses are paid in the month incurred . How much borrowing will
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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AlNahdha company is preparing its cash budget for the first half of the year 2022. The company records shows that it has $20,000 in the cash at the start of the period . Cash collections from customers for the period are budgeted at $56,000 . Purchases of inventory as budgeted will cost cash payment during the period of $60,000 . The Company intends to keep its cash balance at the end of the period at $10,000 . Other operating expenses for this period are budgeted at \$30,000 , which includes $4,000 depreciation and any cash expenses are paid in the month incurred . How much borrowing will the company need in the first half of 2022
a. $12,000
b.$22,000
c. None of the given answers
d. $20,000
e. $10,000
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