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.

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.

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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Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $ 200,000 $ 350,000 $ 230,000 $250,000 $274,000 $244,000 $234,000 $ 254,000 Total cash receipts Total cash disbursements The company's beginning cash balance for the upcoming fiscal year will be $24,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated by a minus sign.)
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What is the budgeted cash receipts value from customers during the year?
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