Solution-Prepare cash budget, Prepare cash budget. (Round

Prepare cash budget

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Reference no: EM132471110

Vernon Medical Clinic has budgeted the following cash flows:

	January	February	March
Cash receipts	$117,000	$123,000	$143,000
Cash payments
For inventory
purchases	98,500	80,500	93,500
For S&A expenses	39,500	40,500	35,500

Vernon Medical had a cash balance of $16,500 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Vernon 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.

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Question 1: cash budget. (Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be indicated with a minus sign. )

Reference no: EM132471110

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Prepare cash budget

Reference no: EM132471110

Reference no: EM132471110

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