Question

The accountant for Vernon’s Dress Shop prepared the following cash budget. Vernon’s desires to maintain a cash cushion of $21,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 1 percent per month.

Required

  1. Complete the cash budget by filling in the missing amounts.

  2. Determine the amount of net cash flows from operating activities Vernon’s will report on the third quarter pro forma statement of cash flows.

  3. Determine the amount of net cash flows from financing activities Vernon’s will report on the third quarter pro forma statement of cash flows.

Find surplus and borrowing for Sept

Req A Req B and C Complete the cash budget by filling in the missing amounts. (Any shortages or repayments should be indicate

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Answer #1

July August Septmber Quarter $ 51,000 $ 21,000 $ 21,000 $ 51,000 $ 1,97,000 $2,17,000 $ 2,57,600 $ 6,71,600 $ 2,48,000 $2,38,Surplus for September = Total Cash available - Total Budgeted Disbursements = 278,600 - 252,693 = $ 25,907 Repayment for SeptB&C Vernons Dress Shop Statement of Cash Flows (Partial) For the Quarter ended 30th September $ 6,71,600 Cash flows from ope

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