E9-6A. Prepare Cash Budget For 3 Months Brewster Corporation expects the following cash receipts and

disbursements during the first quarter of 2016 (receipts exclude new borrowings and disbursements

exclude interest payments on borrowings since January 1, 2016):

January February March

Cash receipts .................................. $260,000 $280,000 $250,000

Cash disbursements ............................ 240,000 320,000 260,000

The expected cash balance at January 1, 2016, is $42,000. Brewster wants to maintain a cash balance at

the end of each month of at least $40,000. Short-term borrowings at 1% interest per month will be used

to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of

the month in which they are needed, with interest for that month paid at the end of the month. Prepare

a cash budget for the quarter ended March 31, 2016.

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