Financial Accounting Question please answer Harrison Health Center has budgeted the following cash flows for theupcoming month:•Cash Receipts=$140,000•Cash Payments:For inventory purchases = $110,000○оFor S&A expenses=$42,500о For interest expense = $1,200Harrison Health Center had a cash balance of $18,000 on January 1.The company desires to maintain a cash cushion of $12,000. Fundsare assumed to be borrowed and repaid at the end of the month.Determine how much the company needs to borrow at the end ofJanuary to maintain its cash cushion.

Step 1: Definition of Cash CushionA cash cushion is the minimum amount of cash that a company…

Answered: Harrison Health Center has budgeted the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 20E

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Relevant data from the operating budget of The Framers are: Other data: Capital assets were sold in quarter 1 and $8,000 was collected in quarter 1 and $500 collected in quarter 2. Dividends of $500 will be paid in May The beginning cash balance was $50,000 and a required minimum cash balance is $10,000. Prepare a cash budget for the first two quarters of the year.
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How much does the company need to borrow ?
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