Morgan Inc. is preparing its cash budget. The company’s policy states that its minimum required cash balance is $20,000 and it needs to borrow money in $1,000 increments at the end of each month, if required. The following data has been provided for March:Data for Cash BudgetActivityMarchCash balance at March 1$21,000Total Cash receipts800,000Total Cash payments$811,500Calculate the estimated cash balance after financing at the end of March:Group of answer choices$11,000$10,500$20,000$20,500

The objective of the question is to calculate the estimated cash balance after financing at the end…

Answered: Morgan Inc. is preparing its cash…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Morgan Inc. is preparing its cash budget. The company’s policy states that its minimum required cash balance is $20,000 and it needs to borrow money in $1,000 increments at the end of each month, if required. The following data has been provided for March:

Data for Cash Budget

Activity	March
Cash balance at March 1	$21,000
Total Cash receipts	800,000
Total Cash payments	$811,500

Calculate the estimated cash balance after financing at the end of March:

Group of answer choices

$11,000

$10,500

$20,000

$20,500

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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