E-M:7-29 Preparing the financial budget-cash budget Hoppy Company requires a minimum cash balance of $3,500. When the company expects a cash deficiency, it borrows the exact amount required on the first of the month. Expected excess cash is used to repay any amounts owed. Interest owed from the previous month's principal balance is paid on the first of the month at 14% per year. The company has already completed the budgeting process for the first quarter for cash receipts and cash payments for all expenses except interest. Hoppy does not have any outstanding debt on January 1. Complete the cash budget for the first quarter for Hoppy Company. Round interest expense to the nearest whole dollar. Total 88,500 HOPPY COMPANY Cash Budget For the Three Months Ended March 31 January February March Beginning balance $3,500 Cash receipts 19,000 27,500 42,000 Cash available 22,500 Cash payments: All expenses except interest 34,000 35,000 39,000 Interest expense 0 Total cash payments 34,000 108,000 (3,500) (3,500) (3,500) (3,500) Ending balance before financing Minimum cash balance desired Projected cash excess (deficiency) Financing: Borrowing Principal repayments Total effects of financing Ending cash balance