Lipman Auto Parts, a family-owned auto parts store, began January with $10,600 cash. Management forecasts that collections from credit customers will be $11,800 in January and $15,300 in February. The store is scheduled to receive $8,500 cash on a business note receivable in January. Projected cash payments include inventory purchases ($17,700 in January and $13,600 in February) and selling and administrative expenses ($2,700 each month). (Click the icon to view additional information about Lipman Auto Parts.) Read the requirements. Beginning cash balance Cash receipts from customers Cash receipt on note receivable Lipman Auto Parts Cash Budget January and February Cash available Cash payments: Purchases of Inventory Selling and administrative expenses Total cash payments Ending cash balance before financing Less: Minimum cash balance desired Projected cash excess (deficiency) Total effects of financing Ending cash balance January February 10600 11800 15300 8500 0 Requirements More info Lipman Auto Parts's bank requires a $10,000 minimum balance in the store's checking account. At the end of any month when the account balance falls below $10,000, the bank automatically extends credit to the store in multiples of $1,000. Lipman Auto Parts borrows as little as possible and pays back loans in quarterly installments of $3,000, plus 6% APR interest on the entire unpaid principal. The first payment occurs three months after the loan. 1. Prepare Lipman Auto Parts's cash budget for January and February. 2. How much cash will Lipman Auto Parts borrow in February if collections from customers that month total $14,300 instead of $15,300? Print Done - X