Question
Zachary Medical Clinic has budgeted the following cash flows. January February March Cash receipts $ 119,000 $ 125,000 $ 145,000 Cash payments For inventory purchases
Zachary Medical Clinic has budgeted the following cash flows.
January | February | March | |||||||
Cash receipts | $ | 119,000 | $ | 125,000 | $ | 145,000 | |||
Cash payments | |||||||||
For inventory purchases | 99,500 | 81,500 | 94,500 | ||||||
For S&A expenses | 40,500 | 41,500 | 36,500 | ||||||
Zachary Medical had a cash balance of $17,500 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. Zachary 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 last years quarterly results.
Required
Prepare a cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments should be indicated with a minus sign.)
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