Problem 14-20A (Algo) Preparing a cash budget LO 14-5

Franklin Medical Clinic has budgeted the following cash flows.

	January			February			March
Cash receipts	$	107,000		$	113,000		$	133,000
Cash payments
For inventory purchases		93,500			75,500			88,500
For S&A expenses		34,500			35,500			30,500

Franklin Medical had a cash balance of $11,500 on January 1. The company desires to maintain a cash cushion of $6,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 2 percent per month. Repayments may be made in any amount available. Franklin 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 last years quarterly results.

Required

Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments should be indicated with a minus sign.)

Cash Budget	January	February	March
Section 1: Cash Receipts
Total cash available
Section 2: Cash Payments
Total budgeted disbursements
Section 3: Financing Activities