Question
The following budget estimates have been prepared by Clifton Company: Cash Receipts Cash Payments May $120,000 $150,000 June $110,300 $150,000 The company likes to maintain
The following budget estimates have been prepared by Clifton Company:
Cash Receipts Cash Payments
May $120,000 $150,000
June $110,300 $150,000
The company likes to maintain a minimum cash balance of $40,000.
If additional cash is needed, the company has a line of credit at 12 percent interest with the local bank. Interest is paid monthly. Monthly loan interest incurred in the month will be paid on the first day of the following month.
Assume a cash balance on May 1 of $40,000.
A. Prepare a cash budget for May and June.
.B Calculate the total loan outstanding at the end of June and total interest incurred for the two month period, May and June?
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A Cash Budget for May and June May Cash Receipts 120000 Cash Payments 150000 Cash Balance on May ...
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Advanced Accounting
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
11th Edition
978-0132568968, 9780132568968
