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It is annual budget preparation time and the accounting team at Penny, Inc is preparing the cash budget for the months of April, May, and June The company has established a $100,000 line of credit with its bank at a 12% annual rate of interest on which borrowings for cash deficits must be made in $1,000 increments.There will not be an outstanding balance on the line of credit loan on March 31, and March 31st cash balance will be $80,000.Principle repayments are to be made in any month in which there is a surplus of cash.Interest is to be paid monthly.Penny intends to maintain a minimum balance of $80,000 at the end of each month by either borrowing for deficits below the minimum balance or repaying the loan balance with excess cash.Expected monthly collection and disbursement patterns are shown below:

CoursHeroTranscribedText: *Collections: 40% of the current month's sales budget and 60% of the previous month's sales budget. *Accounts Payable Disbursements: 15% of the current month's accounts payable budget and 85% of the previous month's accounts payable budget. *All other disbursements occur in the month in which they are budgeted Budget Information March Sales $ 100,000 Accounts Payable $ 20,000 Payroll $ 50,000 Other Disbursements $ 25,000 Required: Create a Cash Budget for April, May, June 9999mm ril 75,000 15,000 40,000 35,000 9999mm 70,000 12,000 35,000 30,000 996 June 1 00,000 20,000 50,000 1 1 ,000

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