Newman Medical Clinic has budgeted the following cash flows. January February March $109,000 $115,000 $135,000 Cash receipts Cash payments For inventory purchases For S&A expenses Newman Medical had a cash balance of $12,500 on January 1. The company desires to maintain a cash cushion of $8,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Newman pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results. 94,500 76,500 35,500 36,500 Required Prepare a cash budget. (Any repayments/shortage should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Cash Budget Cash available Less: Cash payments Total budgeted payments Payments minus receipts Financing Activity 89,500 31,500 69 January 0 0 0 0 $ 66 February $ 0 0 0 0 0 $ $ March 0 0 0 0 0

Newman Medical Clinic has budgeted the following cash flows. January February March $109,000 $115,000 $135,000 Cash receipts Cash payments For inventory purchases For S&A expenses Newman Medical had a cash balance of $12,500 on January 1. The company desires to maintain a cash cushion of $8,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Newman pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results. 94,500 76,500 35,500 36,500 Required Prepare a cash budget. (Any repayments/shortage should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Cash Budget Cash available Less: Cash payments Total budgeted payments Payments minus receipts Financing Activity 89,500 31,500 69 January 0 0 0 0 $ 66 February $ 0 0 0 0 0 $ $ March 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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