Foyert Corp requires a minimum $7,300 cash balance. If necessary, loans are take

Question

Foyert Corp requires a minimum $7,300 cash balance. If necessary, loans are taken to meet this requirement at a cost of 2% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $7,300 and the company has an outstanding loan of $3,300. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow october November December $23, 300 $17, 300 $21,300 Cash receipts Boo Cash payments25,950 16,300 14,700 Het Pnt Prepare a cash budget for October, November, and December. (Negative balances and Loan repayment amounts (if any) should be terences indicated with minus sign. Round your final answers to the nearest whole dollar.) FOYERT CORP. Cash Budgt For October, November, and December October November December Beginning cash balance 7.300 Total cash available

Explanation / Answer

Answers

Cash Budget

October

November

December

Beginning Cash balance

$                                     7,300

$                       7,300

$                             7,300

Cash receipts

$                                   23,300

$                     17,300

$                           21,300

Total Cash available

$                                   30,600

$                     24,600

$                           28,600

Cash payments

$                                   25,950

$                     16,300

$                           14,700

Interest payment

$                                           66 [3300 x 2%]

$                           120 [6016 x 2%]

$                                 103 [5136 x 2%]

Preliminary Cash Balance

$                                     4,584

$                       8,180

$                           13,797

Loan Borrowed (repaid)

$                                     2,716

$                         (880)

$                           (5,136)

Ending Cash Balance

$                                     7,300

$                       7,300

$                             8,661

Loan Details

Loan balance - Beginning of month

$                                     3,300

$                       6,016

$                             5,136

Additional Loan (repayments)

$                                     2,716

$                         (880)

$                           (5,136)

Loan balance - Ending of month

$                                     6,016

$                       5,136

$                                      0

Cash Budget

October

November

December

Beginning Cash balance

$                                     7,300

$                       7,300

$                             7,300

Cash receipts

$                                   23,300

$                     17,300

$                           21,300

Total Cash available

$                                   30,600

$                     24,600

$                           28,600

Cash payments

$                                   25,950

$                     16,300

$                           14,700

Interest payment

$                                           66 [3300 x 2%]

$                           120 [6016 x 2%]

$                                 103 [5136 x 2%]

Preliminary Cash Balance

$                                     4,584

$                       8,180

$                           13,797

Loan Borrowed (repaid)

$                                     2,716

$                         (880)

$                           (5,136)

Ending Cash Balance

$                                     7,300

$                       7,300

$                             8,661

Loan Details

Loan balance - Beginning of month

$                                     3,300

$                       6,016

$                             5,136

Additional Loan (repayments)

$                                     2,716

$                         (880)

$                           (5,136)

Loan balance - Ending of month

$                                     6,016

$                       5,136

$                                      0

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