Question - Karim Corp. requires a minimum $8,400 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,800 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow:
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July
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August
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September
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Cash receipts
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$24,400
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$32,400
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$40,400
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|
Cash disbursements
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28,600
|
30,400
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32,400
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Prepare a cash budget for July, August, and September.