Question

Hex Company requres a minmum cash balance of $3,000 When the company expects a cash deliciency, t borows the exad amount required on the test of the month Expected excess cash is used to repay any amounts owed Inter first of the month at 15% per year. The company has already completed the budgetng process for the first quarter for cash recepts and cash peyments for all expenses except inerest (Clck the icon to viow the completed budget infomation) Hex does not have any outstanding debt on January 1. Complete the cash budget for the frst quarter for Hex Company Round interest expense to the nearest whole dolar Begin by preparing the cash budget for January, then prepare the cash budget for February and March, Finaly, panasa the toals o the aad deticency and/or negative efflects of tinancing with a minus sign or parentheses) Comaisto al anc hos Entara rCan balances Baund atancus.o Data Table Hex Company Cash Budget For the Three Months Ended March 31 January February Hex Compamny Beginning cash balance Cash receipts Cash available Cash payments 3,000 20,000 Cash Budget For the Three Months Ended March 31 28,000 January February 23,000 March Total Beginning cash balance 3,000 20,000 28,000 All expenses except interest Cash receipts 43.500 40000 91.500 34.000 Cash avalable Interest expense 23000 Cash payments 40,000 Total cash payments All expenses escept inerest Endng cash balance before tonancing 34000 37,000 40,000 (17,000) 111.000 nterest expense (3000 Minimum cash balance desired Projected cash excess (deficcency) Financing d,000) 40000 Total cash payments (20.000 Endng cash balance before onancn Minmum cash balance desired a.000 0000 00005 (3000 Borrowing Prinopal repayments 20000 Proected excess (oconcy) Financhg Total efects of cinancing 20,000 Borowing 000 Ending cash balance Princoal repeyments Total eftects of teancin Enter any number in the edit felds and then dick Check Aniwer Endng csh baance parts 2 oming Type here to search O

Answer 1

Hex Company Cash Budget For the three Months ending 31 March January February March Total Beginning Cash balance $ 3,000 $3,000 $3,000 $ 3,000 Cash Receipts $ 20,000 $ 28,000 $ 43,500 $ 91,500 Cash Balance $ 23,000 $ 31,000 $ 46,500 $ 94,500 Cash Payments All expenses except interest $ 40,000 $ 34,000 $ 37,000 $ 111,000 Interest expense $ 250$ 328 $ 578 Total Cash Payments $ 40,000 $ 34,250 $ 37,328 $ 111,578 Ending cash balance before financ-s 17,000- 3,250 $ 9,172 - 17,078 Minimum cash balance desired $ 3,000-$ 3,000-$ 3,000-$ 3,000 Projected cash excess (deficiency) -$ 20,000-$ 6,250 $ 6,172 |-$ 20,078 Financing Borrowing $ 20,000 $ 6,250 $ - $ 26,250 Principal Payments - $ $ 3,172 - 3,172 Total effects of financing $ 20,000$ 6,250$ 3,172 $ 23,078 Ending Cash balance $ 3,000 $3,000 $3,000 $ 3,000 Workings: February Interest =($20,000 * 15%) *1/12 = $250 March Month Interest = $26,250 * 15%) *1/12 = $328