Problem 14-20A (Static) Preparing a cash budget LO 14-5 Fayette Medical Clinic has budgeted the following cash flows. Cash receipts Cash payments For inventory purchases Por S&A expenses March January February $240,000 $232,000 $272,000 Cash Budget 220,000 164,000 62,000 64,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, 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. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results. Section 1: Cash receipts Beginning cash balance Add: Cash receipts Total cash available Section 2: Cash payments For inventory purchases For S&A expenses Interest expense per month Required Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.) January 190,000 54,000 February 16,000 $ 16,000 $ 16,000 $ 16,000 March 16,000 16,000
Problem 14-20A (Static) Preparing a cash budget LO 14-5 Fayette Medical Clinic has budgeted the following cash flows. Cash receipts Cash payments For inventory purchases Por S&A expenses March January February $240,000 $232,000 $272,000 Cash Budget 220,000 164,000 62,000 64,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, 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. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results. Section 1: Cash receipts Beginning cash balance Add: Cash receipts Total cash available Section 2: Cash payments For inventory purchases For S&A expenses Interest expense per month Required Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.) January 190,000 54,000 February 16,000 $ 16,000 $ 16,000 $ 16,000 March 16,000 16,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 14-20A (Static) Preparing a cash budget LO 14-5
Fayette Medical Clinic has budgeted the following cash flows.
Cash receipts
Cash payments
Por inventory purchases
Por S&A expenses
January February March
$240,000 $232,000 $272,000
Cash Budget
220,000
62,000
Section 1: Cash receipts
Beginning cash balance
Add: Cash receipts
Total cash available
Section 2: Cash payments
For inventory purchases
For S&A expenses
Interest expense per month
Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are
assumed to be borrowed, in increments of $2,000, 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. Fayette pays its vendors on the last day of the month also. The company had a
monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results.
Required
Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the
nearest whole dollar amounts.)
164,000
64,000
January
16,000
190,000
54,000
February
$ 16,000 $
16,000 $
16,000
March
16,000
16,000
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