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 5P
Related questions
Concept explainers
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.
Question
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning