Question

January $240,000 February $232,000 March $272,000 Cash receipts Cash payments For inventory purchases For S&A expenses 220,000 62,000 164,000 64,000 190,000 54,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from this year's quarterly results. Required Prepare a cash budget. (Any repayments/shortage should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.) Cash Budget January February March 0 $ Cash available Less: Cash payments Total budgeted payments Payments minus receipts 0 0 Financing Activity $ 0 $ 0 $

Answer 1

January Febrauary March 16,000.00 $ 10,000.00 $ 240,000.00 $ 232,000.00 $ 256,000.00 $ 242,000.00 $ 10,000.00 272,000.00 282,000.00 Schedule of Cash Budget Particulous Opening Cash balance Cash Receipts Cash Available Payments >Paid on Purchases >Selling & Admin Exp Total Payments -B Net Balance (A-B) Finance: Opening Finance Loan Taken Loan Paid Interest Closing Finance Closing Balance 220,000.00 62,000.00 282,000.00 (26,000.00 $ $ $ $ 164,000.00 64,000.00 228,000.00 14,000.00 $ $ $ $ 190,000.00 54,000.00 244,000.00 38,000.00 $ 116,000.00 $ 113,960.00 80,000.00 36,000.00 $ 2,040.00 $ 1,960.00 $ 113,960.00 $ 10,000.00 $ 26,860.00 1,140.00 87,100.00 10,000.00 $ $ 116,000.00 10,000.00 $ $