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Newman Medical Clinic has budgeted the following cash flows. January February March   Cash receipts $ 101,000 $ 107,000 $ 127,000   Cash payments      For inventory purchases 90,500 72,500 85,500      For S&A expenses 31,500 32,500 27,500      Newman Medical...

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Accounting

Newman Medical Clinic has budgeted the following cashflows.
JanuaryFebruaryMarch
  Cash receipts$101,000$107,000$127,000
  Cash payments
     For inventory purchases90,50072,50085,500
     For S&A expenses31,50032,50027,500

     Newman Medical had a cash balanceof $8,500 on January 1. The company desires to maintain a cashcushion of $6,000. Funds are assumed to be borrowed, in incrementsof $1,000, and repaid on the last day of each month; the interestrate is 2 percent per month. Repayments may be made in any amountavailable. Newman pays its vendors on the last day of the monthalso. The company had a monthly $40,000 beginning balance in itsline of credit liability account from this year’s quarterlyresults.

Required

Prepare a cash budget. (Any repayments/shortage shouldbe indicated with a minus sign. Round your answers to the nearestwhole dollar amount.)

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--Requirement, asked

Cash Budget January February March
Beginning cash balance $                 8,500.00 $                       6,700.00 $                                          6,000.00
Add: Cash receipts $             101,000.00 $                   107,000.00 $                                      127,000.00
Cash available $             109,500.00 $                   113,700.00 $                                      133,000.00
Less: Cash payments
For inventory purchases $               90,500.00 $                     72,500.00 $                                        85,500.00
For S&A expenses $               31,500.00 $                     32,500.00 $                                        27,500.00
Interest expense $                     800.00 $                       1,200.00 $                                          1,170.00
Total budgeted payments $             122,800.00 $                   106,200.00 $                                      114,170.00
Payments minus receipts
Surplus (Deficit) $             (13,300.00) $                       7,500.00 $                                        18,830.00
Financing Activity
Borrowing (repayment) $               20,000.00 $                     (1,500.00) $                                      (12,830.00)
Ending cash balance $                 6,700.00 $                       6,000.00 $                                          6,000.00

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Newman Medical Clinic has budgeted the following cashflows.JanuaryFebruaryMarch  Cash receipts$101,000$107,000$127,000  Cash payments     For inventory purchases90,50072,50085,500     For S&A expenses31,50032,50027,500     Newman Medical had a cash balanceof $8,500 on January 1. The company desires to maintain a cashcushion of $6,000. Funds are assumed to be borrowed, in incrementsof $1,000, and repaid on the last day of each month; the interestrate is 2 percent per month. Repayments may be made in any amountavailable. Newman pays its vendors on the last day of the monthalso. The company had a monthly $40,000 beginning balance in itsline of credit liability account from this year’s quarterlyresults.RequiredPrepare a cash budget. (Any repayments/shortage shouldbe indicated with a minus sign. Round your answers to the nearestwhole dollar amount.)

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