Let's put together a monthly cash budget now. All numbers are in dollars. Fill in the blanks wherever you see oneThe company desires a cash balance of $12,000 at the end of each month, and this requirement was met at the end of the last calendar year. There are no outstanding loans at the beginning of January; but the company has $14,000 in short-term investments.

In any month in which there is an expected cash deficiency, the company will first liquidate any available short-term investments. If the deficiency still exists, the company's bank will extend it a loan equal to the expected shortage amount. The loan is assumed to have been made on the last day of the month in which it is required.

Any time the company has a cash surplus, it must repay as much of the outstanding loans as possible. The bank charges monthly interest of 1% on any outstanding loan balance and the interest must be paid by the end of each month. Any money left in excess of the desired minimum cash balance, after paying off outstanding loans and interest for the month, is invested elsewhere.

Find the missing numbers in the table and complete the monthly cash budget. Perhaps one student can prepare the budget for January; another student can do it for February; and still another one can do it for March.

\begin{tabular}{|c|c|c|c|} \hline 20 & January & February & March \\ \hline \multicolumn{4}{|l|}{ Beginning cash balance } \\ \hline Add: Cash receipts & 360,000.00 & 335,000.00 & 354,000.00 \\ \hline Total cash available & 372,000.00 & & \\ \hline \multicolumn{4}{|l|}{ Less: Expected cash needs } \\ \hline For inventory purchases & (160,000.00) & (155,000.00) & \\ \hline For S\&A expenses & & (124,000.00) & (120,000.00) \\ \hline To purchase assets & (90,000.00) & & 0.00 \\ \hline To pay various taxes & 0.00 & 0.00 & (18,000.00) \\ \hline For dividend payment & (20,000.00) & 0.00 & 0.00 \\ \hline Total expected cash payments & (390,000.00) & (354,000.00) & (310,000.00) \\ \hline \multirow{2}{*}{\multicolumn{4}{|c|}{Amountofshortagethatcanbemadeupbysellingexistingshort-terminvestmentsforcash(orsurpluscashthatcanbeinvestedinshort-terminvestments)}} \\ \hline & & & \\ \hline Financing activity: & & & \\ \hline \multicolumn{4}{|l|}{ Amount borrowed (repaid) } \\ \hline Interest expense & & & \\ \hline Target ending cash balance & & & \\ \hline \end{tabular}