Question 6

Hip Company requires a minimum cash balance of $4,100. When the company expects a cash deficiency, it borrows the exact amount required on the first of the month. Expected excess cash is used repay any amounts owed. Interest owed from the previous month's principal balance is paid on the first of the month at 10% per year. The company has already completed the budgeting process for the first quarter for cash receipts and cash payments for all expenses except interest. Click the icon to view the completed budget information.) Hip does not have any outstanding debt on January 1. Complete the cash budget for the first quarter for Hip Company. Round interest expense to the nearest whole dollar. Data table March Total 41,000 92,500 Hip Company Cash Budget For the Three Months Ended March 31 January February Beginning cash balance $ S 4,100 23,000 28,500 Cash receipts Cash available 27,100 Cash payments: All expenses except interest 36,000 32,000 Interest expense 36,000 Total cash payments Ending cash balance before financing (4.100) Minimum cash balance desired Projected cash excess deficiency) Financing Borrowing 34,000 102,000 (4,100 (4,100 ) (4,100) Principal repayments Total effects of Ofinancing Ending cash balance Begin by preparing the cash budget for January, then prepare the cash budget for February and March. Finally, prepare the totals for the quarter. (Complete all input fields. Enter a "0"for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency and/or negative effects of financing with a minus sign or parentheses.) Hip Company Cash Budget For the Three Months Ended March 31 January February March Total Beginning cash balance 4,100 Cash receipts 23,000 28,500 41,000 92.500 Cash available 27.100 Cash payments: All expenses except interest 36,000 32.000 34,000 102.000 Interest expense 38.000 Total cash payments Ending cash balance before financing Minimum cash balance desired (4 100) (4.100) (4.100) (4.100) Projected cash excess (deficiency) Financing Borrowing Principal repayments Total effects of financing Ending cash balance