Newman Medical Clinic has budgeted the following cash flows. January February March Cash receipts $ 118,000 $ 124,000 $ 144,000 Cash payments For inventory purchases 99,000 81,000 94,000 For S&A expenses 40,000 41,000 36,000
Newman Medical had a cash balance of $17,000 on January 1. The company desires to maintain a cash cushion of $5,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Newman 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.
Required Prepare a cash budget. (Any repayments/shortage should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.)