Cash Budget & Short-Term Financing Presented below are partial October, November
ID: 2560801 • Letter: C
Question
Cash Budget & Short-Term Financing
Presented below are partial October, November, and December cash budgets for Holidays Events.
Loans are obtained in increments of $1,000 at the start of each month to maintain a minimum end-of-month balance of $12,000. Interest is one percent simple interest (no compounding) per month, payable when the loan is repaid. Repayments are made as soon as possible, subject to the minimum end-of-month balance.
Complete the short-term financing section of the cash budget and all missing figures.
Use a negative sign with answers to indicate a cash disbursement.
HOLIDAY EVENTS Partial Cash Budgets For the Months of October, November, and December October November December Total Cash balance, beginning $22,000 $Answer $Answer $Answer Collection on sales 34,000 39,000 79,000 Answer Cash available for operations Answer Answer Answer Answer Disbursements for operations (49,000) (59,000) (40,000) Answer Ending cash before borrowings or replacements Answer Answer Answer Answer Short-term finance: New loans Answer Answer Answer Answer Repayments Answer Answer Answer Answer Interest Answer Answer Answer Answer Cash balance, ending $Answer $Answer $Answer $AnswerExplanation / Answer
HOLIDAY EVENTS Partial Cash Budgets For the Months of October, November, and December October November December Total Cash balance, beginning $22,000 12,000 12,000 $22,000 Collection on sales 34,000 39,000 79,000 152,000 Disbursements for operations -49,000 -59,000 -40,000 -148,000 Ending cash before borrowings or replacements 7,000 -8,000 51,000 26,000 Short-term finance: New loans 5000 20000 0 25000 Repayments 0 0 -25000 -25000 Interest 0 0 -300 -300 Cash balance, ending 12,000 12,000 25,700 25,700 Interest Computation *[($5,000 × 0.01 × 2 months) + ($20,000 × 0.01 × 1 month)]=$300