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 3% 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 $43,000, 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 July August $ 94,000 $120,000 122,000 108,900 September $ 159,000 136,400 Prepare a cash budget for July, August, and September. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 3% 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 $43,000, 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.
July
Cash receipts
Cash payments
$ 94,000
122,000
August September
$120,000
108,900
$ 159,000
136,400
Prepare a cash budget for July, August, and September.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to
the nearest whole dollar.
Answer is not complete.
MOTORS CORPORATION
Cash Budget
July
August
September
Beginning cash balance
$ 43,000
$ 30,000
$
30,000
Add: Cash receipts
94,000
120,000
159,000
Total cash available
137,000
150,000
189,000
Less: Cash payments for
All items excluding interest
122,000
108,900
136,400
Interest on loan
0
300X
320x
Total cash payments
Preliminary cash balance.
Additional loan (loan repayment)
122,000
15,000
15,000
109,200
136,720
40,800
52,280
le on non
(31,100) x
5755
En 200
Transcribed Image Text: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 3% 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 $43,000, 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. July Cash receipts Cash payments $ 94,000 122,000 August September $120,000 108,900 $ 159,000 136,400 Prepare a cash budget for July, August, and September. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar. Answer is not complete. MOTORS CORPORATION Cash Budget July August September Beginning cash balance $ 43,000 $ 30,000 $ 30,000 Add: Cash receipts 94,000 120,000 159,000 Total cash available 137,000 150,000 189,000 Less: Cash payments for All items excluding interest 122,000 108,900 136,400 Interest on loan 0 300X 320x Total cash payments Preliminary cash balance. Additional loan (loan repayment) 122,000 15,000 15,000 109,200 136,720 40,800 52,280 le on non (31,100) x 5755 En 200
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