AAA Company is preparing its 3rd quarter budget and - 13482

Solution Posted by
yousafbhutta

yousafbhutta

Rating : (28)C
Solution Detail
Price: $3.00
  • From: Business,
  • Posted on: Fri 24 Aug, 2012
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

 

AAA Company is preparing its 3rd quarter budget and provides the following data:

 

 

Jul

Aug

Sep

Cash collections

$50,000

$40,000

$48,000

Cash payments:

     

Purchases of inventory

31,000

22,000

18,000

Operating expenses

12,000

9,000

11,600

Capital expenditures

0

19,000

0

 



Cash balance at June 30 is projected to be $4,000. The company is required to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and pays interest monthly at an annual rate of 5%. All financing transactions are assumed to take place at the end of the month. Loan balance should be repaid in increments of $5,000 when there is surplus cash.

Using the format below, please complete the cash budget:

 

Cash Budget

Jul

Aug

Sep

Beginning cash balance

     

Cash collections

     

Cash available

     

Cash payments:

     

Purchases of inventory

     

Operating expenses

     

Capital expenditures

     

Total cash payments

     

Ending cash balance before financing

     
       

Minimum cash balance desired

     

Cash excess/(deficiency)

     

Financing

     

Borrowing at end of month

     

Principal payments at end of month

     

Interest expense at 5%

     

Total effects of financing

     

Ending cash balance

     

 

Solution Description

 

If you will give me A+++ rating with y

Attachments
Solution of cash budget.docx
Solution of cas...