Cash Budget | January | February | March |
Cash receipts | |||
Beginning cash balance | 16500 | 10300 | 10000 |
cash receipts | 117000 | 123000 | 143000 |
Total cash available [1] | 133500 | 133300 | 153000 |
Cash payments | |||
For inventory purchases | 98500 | 80500 | 93500 |
For S & A Expenses | 39500 | 40500 | 35500 |
Interest expense | 40000*3%=1200 | 56000*3%=1680 | 55380*3%= 1661 |
Total budgeted disbursements [2] | 139200 | 122680 | 130661 |
Excess of receipts over disbursement [1-2] | -5700 | 10620 | 22339 |
Financing activities | |||
Borrowing /(repayment) | 16000 | (620) | (12339) |
Ending cash balance | 10300 | 10000 | 10000 |
Working note:
a)For month of January,Amount borrowed = Desired ending balance - Excess of receipts over disbursement
= 10000 - (-5700)
= 10000 +5700
= 15700 (rounded to nearest 16000)
Since amount is borrowed in increments of 1000 ,amount borrowed is nearest to 16000
b)Amount financed at end of January = 40000 (beginning ) +16000 additional borrowing = 56000
c)Amount financed at end of February = 56000 (beginning ) -620 repatyment= 55380
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