Question
Foyert Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month
Foyert Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $8,000 and the company has an outstanding loan of $4,000. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow.
| October | November | December | |
| cash receipts | 24,000 | 18,000 | 22,000 |
| cash payment | 27,000 | 17,000 | 14,000 |
Prepare a cash budget for October, November, and December. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)
| Foyert corp. | |||
| Cash Budget | |||
| For October, November, and December | |||
| October | November | December | |
| Beginning Cash Balance | $8,000 | $8,000 | $8,000 |
| Cash Receipts | 24,000 | 18,000 | 22,000 |
| Total Cash Available | 32,000 | 26,000 | 30,000 |
| Cash Payment | 27,000 | 17,000 | 14,000 |
| Interest on Bank Loan | 40 | 71 | 62 |
| Preliminary cash balance | $4,960 | $8,929 | $15,938 |
| Additional loan | 3040 | (929) | (6,111) |
| Ending cash balance | $8,000 | $8,000 | $ |
| Loan Balance | |||
| Loan balance begin of month | 4,000 | 7,040 | 6,111 |
| additional loan | 3,040 | (929) | |
| loan balance | 7,040 | 6,111 | |
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Operational Auditing
Authors: David G Komatz
1st Edition
B09K24NM14, 979-8751454357
