Preparing a Cash Budget
McBride Medical Clinic has budgeted the following cash flows.
|
January |
February |
March |
|
|
Cash receipts |
101,000 |
108,000 |
125,000 |
|
Cash payments: |
|||
|
For inventory purchases |
92,000 |
72,000 |
83,000 |
|
For S&A expreses |
30,000 |
32,000 |
26,000 |
McBride Medical had a cash balance of $7,000 on January 1. The company desires to maintain a cash cushion of $5,000. Funds are assumed to be borrowed, in increments of $1,000 and repaid on the last day of each month; the interest rate is 1 percent per month. McBride pays its vendor on the last day of the month also. The company had a $30,000 beginning balance in its line of credit liability account.
Required:
Prepare a cash budget. (Round all computations to the nearest whole dollar).