Question
Cash Budget & Short-Term Financing Presented below are partial October, November, and December cash budgets for Holidays Events. Loans are obtained in increments of $1,000
Cash Budget & Short-Term Financing Presented below are partial October, November, and December cash budgets for Holidays Events.
Loans are obtained in increments of $1,000 at the start of each month to maintain a minimum end-of-month balance of $12,000. Interest is one percent simple interest (no compounding) per month, payable when the loan is repaid. Repayments are made as soon as possible, subject to the minimum end-of-month balance.
Complete the short-term financing section of the cash budget and all missing figures.
Use a negative sign with answers to indicate a cash disbursement or a negative ending balance.
| HOLIDAY EVENTS | |||||
|---|---|---|---|---|---|
| Partial Cash Budgets | |||||
| For the Months of October, November, and December | |||||
| October | November | December | Total | ||
| Cash balance, beginning | $23,000 |
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| Collection on sales | 35,000 | 40,000 | 80,000 |
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| Cash available for operations |
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| Disbursements for operations | (50,000) | (60,000) | (40,000) |
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| Ending cash before borrowings or replacements |
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| Short-term finance: | |||||
| New loans |
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| Repayments |
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| Interest |
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| Cash balance, ending |
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
16th edition
978-1259307416
