Question

3 of 4 (2 complete) HW Score: 5.71%, 3.43 of 60 pts Score: 0 of 10 pts CP22-57 Continuing Problem (similar to) Question Help Assume Dean Consulting began January with $14,000 cash. Management forecasts that cash receipts from credit customers will be $56,000 in January and $60,000 in February. Projected cash payments include equipment purchases (522,000 in January and $45,000 in February) and selling and administrative experises $10,000 each month). Dean's bank requires a $20,000 minimum balance in the firm's checking account. At the end of any month when the account balance falls below $20,000, the bank automatically extends credit to the firm in multiples of $5,000. Dean borrows as little as possible and pays back loans each month in $1,000 increments, plus 12% interest on the entire unpaid principal. The first payment occurs one month after the loan Requirements 1. Prepare Dean Consulting's cash budget for January and February 2018 2. How much cash will Dean borrow in February if cash receipts from customers that month total $50.000 instead of $60,000? haring Library Requirement 1. Prepare Dean Consulting's cash budget for January and February Begin by completing the January cash budget, then complete the February cash budget. (Complete all answer boxes Enter a "O for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency, principal repayments, and/or a net repayment on financing with a minus sign or parentheses. Assume there is no debt at the beginning of January) urces 30) Dean Consulting Cash Budget Two Months Ended February 2018 Tanian on Tools Enter any number in the edit fields and then click Check Answer 3 parts Clear All Check Answer 5 remaining

Answer 1

Requirement 1 CASH BUDGET JANUARY FEBRUARY Beginning Cash Balance $ 14,000.00 $ 37,000.00 Cash Receipts $ 55,000.00 $ 60,000.00 Cash available $ 69,000.00 $ 97,000.00 Cash Payments Capital Expenditures $ 22,000.00 $ 45,000.00 Selling and administrative Expenses $ 10,000.00 $ 10,000.00 Total Cash Payments $ 32,000.00 $ 55,000.00 Ending Cash Balance before financing $ 37,000.00 $ 42,000.00 Minimum cash balance desired $ 20,000.00 $ 20,000.00 Projected Cash Excess (deficiency) $ 17,000.00 $ 22,000.00 Financing: Borrowing $ Principal Repayments $ - IS Total Effects of financing $ Ending Cash Balance $ 37,000.00 $ 42,000.00 Requirement 2 CASH BUDGET JANUARY FEBRUARY Beginning Cash Balance $ 14,000.00 $ 37,000.00 Cash Receipts $ 55,000.00 $ 50,000.00 Cash available $ 69,000.00 $ 87,000.00 Cash Payments Capital Expenditures $ 22,000.00 $ 45,000.00 Selling and administrative Expenses $ 10,000.00 $ 10,000.00 Total Cash Payments $ 32,000.00 $ 55,000.00 Ending Cash Balance before financing $ 37,000.00 $ 32,000.00 Minimum cash balance desired $ 20,000.00 $ 20,000.00 Projected Cash Excess (deficiency) $ 17,000.00 $ 12,000.00 Financing: Borrowing Principal Repayments $ - $ - Total Effects of financing $ - $ Ending Cash Balance $ 37,000.00 $32,000.00 $