The answer is incomplete please complete it ... Fanning Medical Clinic has budge

Question

The answer is incomplete please complete it ...

Fanning Medical Clinic has budgeted the following cash flows: Cash receipts Cash payments $185,868 $111,808 $131,8068 For inventory purchases For S&A; expenses 92,588 33,588 74,588 34,588 87,588 29,580 Fanning Medical had a cash balance of $10,500 on January 1. The company deslres to malntaln a cash cushlon of $10,000. Funds are assumed to be borrowed, In Increments of $1,000, and repald on the last day of each month; the Interest rate Is 3 percent per month. Repayments may be made In any amount avallable. Fanning pays Its vendors on the last day of the month also. The company had a monthly $40.000 beginning balance In lts line of credit liabllity account from this years quarterly results. Required Prepare a cash budget. (Round Intermedlate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be Indicated with a minus sign.) 3 Answer is not complete. (21,000) Beginning cash balance Add: Cash receipts Cash avaiable Less: Cash payments (19,000) 31,000 112,000 001 105.000 111,0000 1 90,000 7 For inventory purchases For S&A; expenses Interest expense per 92,500 33,500 4,0087,500 34.500 29.500 month 128,000 109,000 117,000 Total budgeted payments Payments minus receipts (21,000) (19,000) (5,000) Surplus (shortage) Financing Activity (21,000) (19,000 5,000)

Explanation / Answer

Cash Budget Jan Feb Mar Beginning cash balance 10500 10300 10440 Add: Cash receipts 105000 111000 131000 Cash available 115500 121300 141440 For inventory purchases 92500 74500 87500 For S&A expenses 33500 34500 29500 Interest expenses per month 1200 1860 1860 (40000*3%) (62000*3%) (62000*3%) Total budgeted payments 127200 110860 118860 Surplus/(Shortage) -11700 10440 22580 Financing activity Borrowing/(repayment) 22000 12580 Minimum balance 10300 10440 10000

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