Chapter 9 Operational Budgeting and Profit Planning A27. Cash Budget & Short-Ter
ID: 2559483 • Letter: C
Question
Chapter 9 Operational Budgeting and Profit Planning A27. Cash Budget & Short-Term Financing Presented are partial October, November, and December cash budgets for Holiday Events: HOLIDAY EVENTS Partial Cash Budgets For the Months of October, November, and December October November December Total ....$23,000 $$? $ 35,000 40,000 80,000 Cash available for operations. Disbursements for operations (50,000) (60,000) ring cash before borrowings or replacements … Short-term finance: (40,000) Interest . Cash balance, ending. $ $ S $ oans are obtained in increments of $1,000 at the start of each month to maintain a minimum end- i-honth balance of $12,000. Interest is one percent simple interest (no compounding) per month, payable eutabie when the loan is repaid. Repayments are made as soon as possible. subject to the minimum end-of-month balance. Required the short-term financing section of the cash budget.Explanation / Answer
October November December Total Cash bal, beginning 23000 12000 12000 47000 Collections on sales 35000 40000 80000 155000 Cash availiable for operations 58000 52000 92000 202000 Disbursements for operations 50000 60000 40000 150000 Ending Cash before borrowing or replacements 8000 -8000 52000 52000 Short-term finance 4000 24400 0 28400 New loans 4000 20400 24400 Repayments 24400 24400 Interest 400 2440 2840 Cash bal, ending 12000 12000 25160 49160