Motors Corporation manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. Ifnecessary, the company borrows to meet this requirement at a cost of 2% interest per month (paid at the end of each month). Anypreliminary cash balance above $30,000 at month-end is used to repay loans. The cash balance on July 1 is $30,000, and thecompany has no outstanding loans. Budgeted cash receipts and budgeted cash payments (other than for interest on the loan and loanactivity) follow.Cash receiptsCash paymentsBeginning cash balanceJuly August$ 81,000 $ 107,000109,00095,900Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should beindicated with minus sign. Round your final answers to the nearest whole dollar.)Total cash availableMOTORS CORPORATIONCash BudgetTotal cash paymentsPreliminary cash balanceAdditional loan (loan repayment)Ending cash balanceLoan activityLoan balance, beginning of MonthAdditional loan (loan repayment)Loan balance, end of monthSeptember$ 146,000123,400$$July000August September0 $0$$00000$$$000000

For a company or an organization cash is an important source which are are used by the company to…

Motors Corporation manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company borrows to meet this requirement at a cost of 2% interest per month (paid at the end of each month). Any preliminary cash balance above $30,000 at month-end is used to repay loans. The cash balance on July 1 is $30,000, and the company has no outstanding loans. Budgeted cash receipts and budgeted cash payments (other than for interest on the loan and loan activity) follow. Cash receipts Cash payments Beginning cash balance July $ 81,000 109,000 Total cash available Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) August $ 107,000 95,900 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan activity Loan balance, beginning of Month Additional loan (loan repayment) Loan balance, end of month MOTORS CORPORATION Cash Budget September $ 146,000 123,400 $ $ July 0 0 0 August September 0 $ 0 $ $ 0 0 0 0 $ 0 $ 0 $ 0 0 0 0 0 0

Motors Corporation manufactures motors for dirt bikes. The company requires a minimum $30,000 cash balance at each month-end. If necessary, the company borrows to meet this requirement at a cost of 2% interest per month (paid at the end of each month). Any preliminary cash balance above $30,000 at month-end is used to repay loans. The cash balance on July 1 is $30,000, and the company has no outstanding loans. Budgeted cash receipts and budgeted cash payments (other than for interest on the loan and loan activity) follow. Cash receipts Cash payments Beginning cash balance July $ 81,000 109,000 Total cash available Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) August $ 107,000 95,900 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan activity Loan balance, beginning of Month Additional loan (loan repayment) Loan balance, end of month MOTORS CORPORATION Cash Budget September $ 146,000 123,400 $ $ July 0 0 0 August September 0 $ 0 $ $ 0 0 0 0 $ 0 $ 0 $ 0 0 0 0 0 0

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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