nning Medical Clinic has budgeted the following cash flows. January $105,000 February $111,000 March Cash receipts Cash payments For inventory purchases For S&A expenses $131,000 92,500 33,500 74,500 34,500 87,500 29,500 nning Medical had a cash balance of $10,500 on January 1. The company desires to maintain a cash cushion of $10,000. Funds sumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per mon payments may be made in any amount available. Fanning pays its vendors on the last day of the month also. The company had onthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![Fanning Medical Clinic has budgeted the following cash flows.
January
$105,000
February
$111,000
March
Cash receipts
Cash payments
For inventory purchases
For S&A expenses
$131,000
92,500
33,500
74,500
34,500
87,500
29,500
Fanning Medical had a cash balance of $10,500 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are
assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month.
Repayments may be made in any amount available. Fanning 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.
Required
Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb83496cd-9baf-4218-91af-6a9eb71001cb%2Fc4442626-dc35-4bc1-8077-05e06422645d%2Fry7wae_processed.jpeg&w=3840&q=75)
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