. Slim Corp. requires a minimum $8,000 casth balance.If necessary, looans meet t

Question

. Slim Corp. requires a minimum $8,000 casth balance.If necessary, looans meet this requirement at a cost of i % interest per month (paid monthly month's end from any excess cash. The cash balance on July 1 is than for loans received for July, August, and September are forecasted as and $40,000, respectively. Payments other than for loan or interest pay period are planned at $28,000, $30,000, and $32,000, respectively at outstanding loans. necessary, loans are taken to are repai receipts other 400. Cash payments for the same July 1, there are no Required: Prepare a cash budget for July, August, and September

Explanation / Answer

Cash budget July August September Total Beginning cash balance 8,400 8,063 8,026 8,400 Add Cash collections 24000 32000 40000 96000 Total collections 32,400 40,063 48,026 1,04,400 Less Cash disbursements 28000 30000 32000 90000 cash balance 4,400 10,063 16,026 14,400 Financing Loan taken 3700 3700 Loan repaid 2000 1700 3700 Interest expense 37 37 17 91 Ending cash balance 8,063 8,026 14,309 14,309

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