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Required: Complete the Cash Budget Check figures: The YMCA will have zero unpaid balance on the line of credit at the end of December and The YMCA December ending cash balance should be $ 19,700.

Required: Complete the Cash Budget Check figures: The YMCA will have zero unpaid balance on the line of credit at the end of December and The YMCA December ending cash balance should be $ 19,700.

FINANCIAL ACCOUNTING
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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Cash Budget Beginning Cash Balance Cash Received from Members Cash Available before payments Cash Paid for Operations Salaries Operating Expenses Cash Flows From Investing Activities: Equipment Purchases Cash Before Financing Activities Payment of Interest Amount to be Borrowed Repayment of Loans Ending Cash Jan-Mar $ 20,000 Apr-June July-Sept Oct. Dec.
Transcribed Image Text:Cash Budget Beginning Cash Balance Cash Received from Members Cash Available before payments Cash Paid for Operations Salaries Operating Expenses Cash Flows From Investing Activities: Equipment Purchases Cash Before Financing Activities Payment of Interest Amount to be Borrowed Repayment of Loans Ending Cash Jan-Mar $ 20,000 Apr-June July-Sept Oct. Dec.
Cash Budget The Churchville YMCA is negotiating a line of credit with their local bank. The bank has asked for a cash budget by quarter for the upcoming year. Under the terms of the loan, the YMCA must maintain a minimum cash balance of $ 10,000 the YMCA may borrow any amount needed-borrowing is made on the last day of each quarter Interest is paid at an annual rate of 12% and is paid on the last day of the next quarter. (Hint, multiply the amount of unpaid borrowings by 3/12 to determine interest for a quarter). The January 1 balance of the line of credit is zero and there is no interest in the first quarter of the year. The YMCA would like to pay back any amounts borrowed as quickly as possible to minimize interest expense (while still maintaining the $10,000 minimum cash balance). Payments of the loan are made on the last day of the quarter. The following projections are provided by the UMCA's bookkeeper: Jan-Mar Cash Received from Members $ 180,000 Cash Disbursements: Salaries Operating Expenses Equipment Purchases Total Cash Disbursements 110,000 95,000 55,000 $ 260,000 Apr-June 290,000 120,000 107,900 227,900 July-Sept 220,300 115,000 105,000 220,000 Oct. Dec. Required: Complete the Cash Budget Check figures: The YMCA will have zero unpaid balance on the line of credit at the end of December and The YMCA December ending cash balance should be $ 19.700. 260,000 120,000 107,000 13,000 240,000
Transcribed Image Text:Cash Budget The Churchville YMCA is negotiating a line of credit with their local bank. The bank has asked for a cash budget by quarter for the upcoming year. Under the terms of the loan, the YMCA must maintain a minimum cash balance of $ 10,000 the YMCA may borrow any amount needed-borrowing is made on the last day of each quarter Interest is paid at an annual rate of 12% and is paid on the last day of the next quarter. (Hint, multiply the amount of unpaid borrowings by 3/12 to determine interest for a quarter). The January 1 balance of the line of credit is zero and there is no interest in the first quarter of the year. The YMCA would like to pay back any amounts borrowed as quickly as possible to minimize interest expense (while still maintaining the $10,000 minimum cash balance). Payments of the loan are made on the last day of the quarter. The following projections are provided by the UMCA's bookkeeper: Jan-Mar Cash Received from Members $ 180,000 Cash Disbursements: Salaries Operating Expenses Equipment Purchases Total Cash Disbursements 110,000 95,000 55,000 $ 260,000 Apr-June 290,000 120,000 107,900 227,900 July-Sept 220,300 115,000 105,000 220,000 Oct. Dec. Required: Complete the Cash Budget Check figures: The YMCA will have zero unpaid balance on the line of credit at the end of December and The YMCA December ending cash balance should be $ 19.700. 260,000 120,000 107,000 13,000 240,000
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