How much interest will be repaid in april

Assignment Help Accounting Basics

Reference no: EM131883451

Problem

Jim Heston has been working on Austin Paints' cash budget for the coming year. Based on his projections for March, the beginning cash balance will be $50,185; cash collections will be $700,000; and cash disbursements will be $710,590. Austin Paints desires to maintain a $50,000 minimum cash balance. The company has a 10 percent open line of credit with its bank, which provides short-term borrowings in $500 increments. All borrowings are made at the beginning of the month, and all repayments are made at the end of the month (in $500 increments). Accrued interest is paid at the time of repayment.

(a) How much will Austin Paints need to borrow from the bank at the beginning of March?

(b) Assuming that Austin Paints has $7,000 in excess cash budgeted for April, how much principal will the company plan to repay? How much interest will be repaid in April?

Reference no: EM131883451

Questions Cloud

Calculate the overhead absorption rate currently in use : Calculate the overhead absorption rate currently in use. Show the over/under absorption of production overheads for each department

How much is the monthly interest expense : How much is the total interest expense over the life of the note? How much is the monthly interest expense?

Explain the connection of the way that the brain develops : Explain the connection of the way that the brain develops from birth to the quality of care, attachments, and stimulation a child receives.

Create a pie chart showing the given fields : Create a projected balance sheet for your business for the first four quarters and the second and third years of operation.

How much interest will be repaid in april : Assuming that Austin Paint has $7,000 in excess cash budget for April, how much principal will company plan to repay? How much interest will be repaid in April?

Create a projected income statement for business : Create a projected income statement for your business for the first four quarters and the second and third years of operation.

How much wil you have to save each year to reach this goal : You want to have $75,000 in 10 years and can get 7% rate of return your investments. How much wil you have to save EACH year to reach this goal?

Identify any external factors as substantial risks : List the risks and assumptions that underlie your financial projections. Identify any external factors that you feel should be disclosed as substantial risks.

Detrmine the nominal rate of the bond : If the expected rate of inflation suddenly rises to 8.5%, what does Fisher's theory say about how the real interest rate will change?

User Account

All Pages