Preparing a Cash Budget $[LO2-CC13]$

The controller $of$ Big River Inc. wishes $to$ improve the company's control system $by$ preparing a monthly cash

budget. The following information relates $to$ the month ending May $31,2024$:

$*Dividends$ are payable $to$ shareholders $of$ record $on$ declaration date, $30$ days after declaration.

Required:

Prepare a cash budget for the month ended May $31,2024,$ indicating how much, $if$ anything, Big River will need $to$

borrow $to$ meet its minimum cash requirement.

Supposing the cash management policy $at$ Big River permits borrowing $upto$ $$30,000$ for the purpose $of$ financial

slack, how much will $be$ borrowed? Contrast your answer $to$ the one obtained $in$ Requirement $(1).$

Explain how cash budgeting can facilitate cash management $at$ Big River.