Newman Medical Clinic has budgeted the following cash flows. January February Ma

Question

Newman Medical Clinic has budgeted the following cash flows. January February March Cash receipts $ 113,000 $ 119,000 $ 139,000 Cash payments For inventory purchases 96,500 78,500 91,500 For S&A expenses 37,500 38,500 33,500 Newman Medical had a cash balance of $14,500 on January 1. The company desires to maintain a cash cushion of $6,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 2 percent per month. Repayments may be made in any amount available. Newman pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year’s quarterly results. Required Prepare a cash budget. (Any repayments/shortage should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.)

CASH BUDGET               JANUARY                    FEBRUARY                MARCH

                                                                            $0                              $0

Cash Available

Less Cash Payments

Total Budgeted Payments

Payments Minus Receipts

Financing Activity

Explanation / Answer

Newman Medical Clinic has budgeted the following cash flows. January February Ma

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