Estimates of cash receipts and cash disbursements

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Reference no: EM131847955

The ABC Company has made the following monthly estimates of cash receipts and cash disbursements when preparing cash budgets for the next twelve months. ABC has beginning cash on hand of $20,000 and wants to maintain this minimum cash level throughout the next year.

Cash Cash

Month Receipts Disbursements

January $100,000 $100,000

February $90,000 $110,000

March $80,000 $110,000

April $100,000 $150,000

May $120,000 $180,000

June $160,000 $180,000

July $200,000 $180,000

August $250,000 $180,000

September $250,000 $150,000

October $200,000 $110,000

November $140,000 $100,000

December $100,000 $100,000

A. Will ABC have to borrow cash during the next year?

B. If the company does need cash, in which month will it first need the cash?

C. What is the most cash the company will need to borrow during the year (maximum amount borrowed in one month)?

D. Will the company have paid back all of its borrowings by the end of the year?

Reference no: EM131847955

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