The accountant for Jean\'s Dress Shop prepared the following cash budget. Jean\'

Question

The accountant for Jean's Dress Shop prepared the following cash budget. Jean's desires to maintain a cash cushion of $10,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 1 percent per month. Required a. Complete the cash budget by filling in the missing amounts b. Determine the amount of net cash flows from operating activities Jean's will report on the third quarter pro forma statement of cash flows. c. Determine the amount of net cash flows from financing activities Jean's will report on the third quarter pro forma statement of cash flows.

Explanation / Answer

Net Cash operating activities = (90000+100000+120300) - (110000+100445+117846-50-54)

= 310300-328187

= 17887 (Outflow)

(Do not add opening balances of cash. I think you committed mistake there.)

If interest calculation and other details are correct then Net cash (Financing activities will be like this

Net cash (financing activities = 5000+445-2454-50-54

= 2887

Interest expenses are part of financing activities...

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