Question
The accountant for Zacharys Dress Shop prepared the following cash budget. Zacharys desires to maintain a cash cushion of $23,000 at the end of each
The accountant for Zacharys Dress Shop prepared the following cash budget. Zacharys desires to maintain a cash cushion of $23,000 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
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Complete the cash budget by filling in the missing amounts.
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Cash Budget July August September Section 1: Cash receipts Beginning cash balance $52,000 Add cash receipts 199,000 219,000 259,600 Total cash available 251,000 Section 2: Cash payments For inventory purchases 175,026 149,730 183,652 For S&A expenses 64,000 70,060 70,932 For interest expense 0 Total budgeted disbursements 239,026 Section 3: Financing activities Surplus (shortage) 11,974 Borrowing (repayments) 11,026 Ending cash balance $23,000 $23,000 $23,000 -
Determine the amount of net cash flows from operating activities Zacharys will report on the third quarter pro forma statement of cash flows.
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Determine the amount of net cash flows from financing activities Zacharys will report on the third quarter pro forma statement of cash flows.
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