Laurey Inc. is working on its cash budget for May. The budgeted beginning cash balance is $45,000. Budgeted cash receipts total $129,000 and budgeted cash disbursements total $124,000. The desired ending cash balance is $60,000. To attain its desired ending cash balance for May, how much does the company need to borrow

The company needs to borrow $10,000

Explanation:

First, let us state the information given clearly:

Beginning cash balance = $45,000

total cash receipt = $129,000

total cash disbursement = $124,000

desired ending cash balance = $60,000

Next Let us calculate the net cash available after the period's transactions:

Net available cash from transactions = total receipt - total disbursements

= 129,000 - 124,000 = $5,000

Next we were told that the beginning balance = $45,000

This means that without borrowing ;

the net ending cash balance = Net available cash from transactions + beginning cash balance = 5,000 + 45,000 = $50,000

Finally, we are told that the desired ending cash balance = $60,000, and the amount of cash available = $50,000, therefore to meet up the target, the amount that needs to be borrowed is calculated thus:

desired ending cash = available cash + borrowed amount

60,000 = 50,000 + borrowed amount

∴ borrowed amount = 60,000 - 50,000 = $10,000

hence the company needs to borrow $10,000

answer; normative economics;

answercountries with higher real income per capita tend to have higher levels of this index.