Rooney Medical had a cash balance of $14,500 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. Rooney 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.
Rooney Medical Clinic has budgeted the following cash flows: February $119,000 March January $113,000 Cash receipts Cash payments For inventory purchases For S&A expenses $139,000 96,500 78,500 38,500 91,500 33,500 37,500 Rooney Medical had a cash balance of $14,500 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. Rooney pays its vendors on the last day of the mont also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's 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.) Cash Budget January February March Beginning cash balance $ S 14,500 (7,300) (5,300) Add: Cash receipts 113,000 119,000 139,000 Cash available 127,500 111,700 133,700 Less: Cash payments For inventory purchases 96,500 78,500 91,500 Interest expense per month 800 For S&A expenses 33,500 37,500 38,500 Total budgeted payments 134,800 117,000 125,000 Payments minus receipts Rooney Medical had a cash balance of $14,500 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. Rooney 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 year's 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.) Cash Budget January February March Beginning cash balance $ S 14,500 (7,300) (5,300) Add: Cash receipts 113,000 119,000 139,000 127,500 111,700 133,700 Cash available Less: Cash payments 91,500 For inventory purchases 96,500 78,500 Interest expense per month 800 For S&A expenses 37,500 38,500 33,500 Total budgeted payments 134,800 117,000 125,000 Payments minus receipts Surplus (shortage) (7,300) (5,300) 8,700 Financing Activity Borrowing (repayment) 8,700 $ Ending cash balance (7,300) (5,300)
