Question
Perez Medical Clinic has budgeted the following cash flows: January February March Cash receipts $ 111,000 $ 117,000 $ 137,000 Cash payments For inventory purchases
Perez Medical Clinic has budgeted the following cash flows:
January | February | March | |||||||
Cash receipts | $ | 111,000 | $ | 117,000 | $ | 137,000 | |||
Cash payments | |||||||||
For inventory purchases | 95,500 | 77,500 | 90,500 | ||||||
For S&A expenses | 36,500 | 37,500 | 32,500 | ||||||
Perez Medical had a cash balance of $13,500 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Perez pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this years quarterly results.
Required
Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign. )
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