Solomon Medical Clinic has budgeted the following cash flows. Cash receipts Cash payments For inventory purchases For S&A expenses January $ 114,000 97,000 38,000 February $ 120,000 79,000 39,000 March $ 140,000 92,000 34,000 Solomon Medical had a cash balance of $15,000 on January 1. The company desires to maintain a cash balance of $7,000. 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. Solomon 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.
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.
I need Interest expense per month for February and March, need Borrowing(repayment) for January, February, and March.
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