A Cerporation is preparing a bodget for the find quartor (January, February, and

Question

A Cerporation is preparing a bodget for the find quartor (January, February, and march) of 2016 cash receipts Total cash disbursements January dollar 490,000 dollar 620,000 February dollar 630,000 dollar 450,000 march dollar 822,500 850,000 The company's beginning each balance for January is dollar 30,000. The company requires a minimum each balance of dollar 30,000 and many borrow any amount needed from a local bank of a monthly rate of 1.0 percentage. The company many borrow any amount at the beginning of any month and repay its loans, or any part of its loans. at the end of the month. Interest payments are dose on any principal at the time it is repaid. When and how much must be borrowed by the company? dollar100.000 in January dollar 130, 000 in January dollar 130, 000 in February dollar 130, 000 in march

Explanation / Answer

b. $130,000 In January

January February March Opening balance 30000 30000 109000 Cash Receipt 490000 630000 822500 Total Cash Available 520000 660000 931500 Total Cash Disbursements 620000 450000 850000 Cash Balance -100000 210000 81500 Borrow from Market 130000 Repayment of Loan 100000 Interest 1000 Ending Cash Balance 30000 109000 81500

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