Question
The accountant for Ericas Dress Shop prepared the following cash budget. Ericas desires to maintain a cash cushion of $17,000 at the end of each
The accountant for Ericas Dress Shop prepared the following cash budget. Ericas desires to maintain a cash cushion of $17,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 3 percent per month. |
Required: |
a. | Complete the cash budget by filling in the missing amounts. (Any repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) |
b. | Determine the amount of net cash flows from operating activities Ericas will report on the third quarter pro forma statement of cash flows. (Round intermediate calculations and final answer to the nearest whole dollar amount.) |
c. | Determine the amount of net cash flows from financing activities Ericas will report on the third quarter pro forma statement of cash flows. (Round intermediate calculations and final answer to the nearest whole dollar amount.) |
Required: a. Complete the cash budget by filling in the missing amounts. (Any repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Cash Budget July AugustSeptember Section 1: Cash receipts $ Beginning cash balance Add cash receipts 49,000 193,000 242,000 213,000 253,600 Total cash available Section 2: Cash payments For inventory purchases For S&A expenses For interest expense 180,652 67,932 172,026 146,730 61,000 67,060 lotal budgeted disbursementsZ33,026 Section 3: Financing activities 8,974 Surplus (shortage) Borrowing (repayments) 8,026 Ending cash balance $17,000$ 17,000 $ 17,000
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