Woody Company had the following budgeted cash receipts and cash disbursements from operations for the third quarter of the current year: Receipts Disbursements July.................................. $100,000 $ 80,000 August............................ 65,000 89,950 September..................... 115,000 110,000 According to a credit agreement with the company's bank, Woody Company promises to have a minimum cash balance of $15,000 at the end of each month. In return, the bank has agreed that the company can borrow up to $50,000 with interest of 12% per year (1% per month). Interest must be paid on the last day of each month. The interest is calculated on the beginning balance of the bank loan for the month. In addition, to the extent possible, the principal amount borrowed from the bank must be repaid on the last day of each month. The company is expected to have a cash balance of $15,000 and a bank loan balance of $5,000 on July 1. Required: Prepare monthly cash budgets for the third quarter, using the following captions: Beginning cash balance Cash receipts Total Cash disbursements

Interest expense: July ( ) August ( ) September ( ) Preliminary balance Additional loan from bank Repayment of loan to bank Ending cash balance Ending bank loan balance