gomez company collected 24,000 on sept gomez company collected 24,000 on sept go
ID: 2405861 • Letter: G
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gomez company collected 24,000 on sept gomez company collected 24,000 on sept gomez company collected 24,000 on sept gomez company collected 24,000 on sept work Gibson Medical Clinic has budgeted the following cash flows Cash recespta 108,000 $114,000 $134,000 Tor inventory parchases 94,000 76,000 89,000 31,000 Tor S&A; expensers 5,000 36,000 Gibson Medical had a cash balance of $12,000 on January 1. The company desires to maintain a cpsh cushion of $7,000. Funds are essumed 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. Gibson pays its vendors on the last day of the month also. The company hada monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results. Prepare a cash budget. (Round Intermediate and final answers to the nearest whole dollar amounts. Any repayments/shortage should be Indicated with a minus sign.) (10,200)(B.200) 34,000 125,800 103,800 Fnanding Adtivity 3 5 6 9Explanation / Answer
In January, minimun cash balance of $7000 has to be maintained hence 17000 is borrowed .
In february interest on 17000 is charged for 2 months i.e. 6% and $980 being surplus after minimum balance of 7000 is repaid against borrowings.
In march interest is charged for 3 months on net borrowings =(17000-980)*9% and $12558 is repaid after keeping minimum balance of 7000 as cash.
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Cash Budget ($) January February March Opening Balance 12000 7000 7000 Add: cash receipts 108000 114000 134000 Total cash available 120000 121000 141000 Less: Cash payments For Inventory purchase 94000 76000 89000 For S&A expenses 36000 36000 31000 Interest 1020 1442 Total Payments 130000 113020 121442 Closing Balance to be maintained 7000 7000 7000 Borrowings/(repayments) 17000 -980 -12558Related Questions
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