Problem 14-20 Preparing a cash budget LO 14-5

Newman Medical Clinic has budgeted the following cash flows.

The Following is correct I cant figure out the interest expenses and barrowing repayment

-please show equations

Thank you!

Janu ary February March Cash receipts Cash payments $111,000 $117,000 $137,000 For inventory purchases 95,500 77,500 90,500 36,500 37,500 32,500 For S&A expenses Newman Medical had a cash balance of S13,500 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. Newman pays its vendors on the last day of the month also. Th monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results e company had a Required Prepare a cash budget. (Any repayments/shortage should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Cash Budget January February March Beginning cash balance Add: Cash receipt Cash available Less: Cash payments 13,500 $ 111,000 124,500 (8,700) $ 117,000 108,300 (6,700) 137,000 130,300 For S&A expenses For inventory purchases Interest expense per month 36,500 95,500 1,200 32,500 90,500 37,500 77,500 Total budgeted payments 133,200 115,000 123,000 Payments minus receipts Surplus (shortage) (8,700) (6,700) 7,300 Financing Activity Borrowing (repayment) Ending cash balance (8,700) $ (6,700) $ 7,300