Monette Company is a manufacturer that is preparing its budget for the upcoming quarter. has prepared the following summary of it budgeted cash flows: August $159.000 September $122.000 July Total cash receipts $96,000 S149.000 Total cash disbursements $105,000 $133,000 The cash balance as of the first day of the third quarter is projected to be $32,000. The company requires a minimum cash balance of $25,000 and may borrow any amount needed from a local bank at a monthly interest rate of 2%. If the company has more than its minimum balance at the end of any given month, it uses the excess funds to pay off any outstanding loan balance. Each month, Monette pays interest on the prior month's ending loan balance. All borrowings, interest payments and pay offs happen on the first day of the month. As of the first day of the third quarter, Monette did not have a loan balance. For simplicity. assume that interest is not compounded. Required: Prepare the company's cash budget for the third quarter, with a column for each month and for the quarter total.

Monette Company is a manufacturer that is preparing its budget for the upcoming quarter. has prepared the following summary of it budgeted cash flows: August $159.000 September $122.000 July Total cash receipts $96,000 S149.000 Total cash disbursements $105,000 $133,000 The cash balance as of the first day of the third quarter is projected to be $32,000. The company requires a minimum cash balance of $25,000 and may borrow any amount needed from a local bank at a monthly interest rate of 2%. If the company has more than its minimum balance at the end of any given month, it uses the excess funds to pay off any outstanding loan balance. Each month, Monette pays interest on the prior month's ending loan balance. All borrowings, interest payments and pay offs happen on the first day of the month. As of the first day of the third quarter, Monette did not have a loan balance. For simplicity. assume that interest is not compounded. Required: Prepare the company's cash budget for the third quarter, with a column for each month and for the quarter total.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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