Question

Prepare Cash Budget For 3 Months
Windsor Corporation expects the following cash receipts and disbursements during the first quarter of 2016 (receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1, 2016)

		January	February	March
Cash receipts		$420,000	$430,000	$390,000
Cash disbursements		380,000	510,000	410,000

The expected cash balance at January 1, 2016, is $65,000. Windsor wants to maintain a cash balance at the end of each month of at least $50,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31, 2016.

WindsorCorporation Cash Budget for the Quarter Ended March 31, 2016
	January	February	March
Beginning cash balance	Answer	Answer	Answer
Cash receipts	Answer	Answer	Answer
Short-term borrowings	Answer	Answer	Answer
Cash available	Answer	Answer	Answer
Cash disbursements	Answer	Answer	Answer
Interest payment	Answer	Answer	Answer
Total cash disbursements	Answer	Answer	Answer
Ending cash balance	Answer	Answer	Answer

Answer 1

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Windsor	Workings
	January	February	March
Beginning cash balance	65,000.00	105,000.00	50,000.00
Cash receipts	420,000.00	430,000.00	390,000.00
Cash available	485,000.00	535,000.00	440,000.00
Less: cash disbursements	380,000.00	510,000.00	410,000.00
Cash surplus/ (deficit)	105,000.00	25,000.00	30,000.00
Minimum cash balance	50,000.00	50,000.00	50,000.00
Financing
Short-term borrowings	-	25,000.00	21,000.00
Interest	-	-	250.00	It is 1% of short term borrowings in February.
Net cash from Financing	-	25,000.00	20,750.00
Budgeted Ending cash balance	105,000.00	50,000.00	50,750.00
Cash Budget for the quarter ended March 31, 2016.
Windsor Corporation
Cash Budget for the Quarter Ended
31-Mar-16
	January	February	March
Beginning cash balance	65,000.00	105,000.00	50,000.00
Cash receipts	420,000.00	430,000.00	390,000.00
Short-term borrowings	-	25,000.00	21,000.00
Cash available	485,000.00	560,000.00	461,000.00
Cash disbursements	380,000.00	510,000.00	410,000.00
Interest payment	-	-	250.00
Total cash disbursements	380,000.00	510,000.00	410,250.00
Ending cash balance	105,000.00	50,000.00	50,750.00