Question

Cash Budget & Short-Term Financing Presented below are partial October, November, and December cash budgets for Holidays Events. Loans are obtained in increments of $1,000 at the start of each month to maintain a minimum end-of-month balance of $12,000. Interest is one percent simple interest (no compounding) per month, payable when the loan is repaid. Repayments are made as soon as possible, subject to the minimum end-of-month balance. Complete the short-term financing section of the cash budget and all missing figures. Use a negative sign with answers to indicate a cash disbursement. HOLIDAY EVENTS Partial Cash Budgets For the Months of October November, and December October November December Total Cash balance, beginning $23,000 $ 0 $ 0 $ Collection on sales 35,000 40,000 80,000 Cash available for operations 0 0 0 Disbursements for operations (50,000) (60,000) (40,000) Ending cash before borrowings or replacements 0 0 0 Short-term finance: New loans o 0 0 Repayments 0 Interest 0 0 0 Cash balance, ending 0 $ 0 $ 0 $ o

Answer 1

Answer

	Oct	Nov	Dec	TOTAL
Cash - Beginning	$23,000	$12,000	$12,000	$23,000
Collection sfrom sales	$35,000	$40,000	$80,000	$155,000
Cash available	$58,000	$52,000	$92,000	$178,000
Disbursement for operations	($50,000)	($60,000)	($40,000)	($150,000)
Ending cash balance	$8,000	($8,000)	$52,000	$28,000
Short term finance:
New loans	$4,000	$20,000		$24,000
Repayments	$0	$0	($24,000)	($24,000)
Interests	$0	$0	($280) [4000 x 1% x 2months + $ 20000 x 1% x 1 month]	($280)
Cash ending balance	$12,000	$12,000	$27,720	$27,720