A company is preparing its cash budget. Its cash balance on January 1 is $290,000 and it has a minimum cash requirement of $340,000. The following data has been provided: January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash payments 984,500 1,210,000 1,075,000 What is the amount of cash excess or deficiency (after considering the minimum cash balance required) for February? a. deficiency of $900 b. excess of $10,900 c. deficiency of $109,100 d. excess of $109,100

Here we can take out whether there is excess or deficiency by adding cash receipts in to opening or given balance of cash , with subtracting cash payments from the total of opening and cash receipts balance. After this we will check this ending balance with he minimum required balance to see whether there is excess or deficiency of cash balance in the month of February. For taking out the opening balance of February , we need to take out the ending balance of January.

Particulars January February

Opening balance $290,000 $366,700

Cash receipts (+) $1061,200 $1182,400

Cash payments (-) $984,500 $1210,000

Ending balance $366,700 $339,100

Balance to be maintained $340,000 $340,000

EXCESS / DEFICIENCY $26,700 - $900