Rundle Medical Clinic has budgeted the following cash flows. Cash receipts Cash payments For inventory purchases For S&A expenses January $ 112,000 96,000 37,000 February $ 118,000 78,000 38,000 March $ 138,000 91,000 33,000 Rundle Medical had a cash balance of $14,000 on January 1. The company desires to maintain a cash balance of $5,000. 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. Rundle 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. Note: Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign.

Rundle Medical Clinic has budgeted the following cash flows. Cash receipts Cash payments For inventory purchases For S&A expenses January $ 112,000 96,000 37,000 February $ 118,000 78,000 38,000 March $ 138,000 91,000 33,000 Rundle Medical had a cash balance of $14,000 on January 1. The company desires to maintain a cash balance of $5,000. 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. Rundle 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. Note: Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 13EA: What is the amount of budgeted cash payments if purchases are budgeted for $420,000 and the...

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Concept explainers

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.

Question

Dd.1

Rundle Medical Clinic has budgeted the following cash flows.
Cash receipts
Cash payments
For inventory purchases
For S&A expenses
January
$ 112,000
96,000
37,000
February
$ 118,000
78,000
38,000
March
$ 138,000
91,000
33,000
Rundle Medical had a cash balance of $14,000 on January 1. The company desires to maintain a cash balance of $5,000. 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. Rundle 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.
Note: Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated
with a minus sign.

Cash Budget
Section 1: Cash Receipts
Total cash available
Section 2: Cash Payments
Total budgeted disbursements
Section 3: Financing Activities
January
February
March

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