Pad * 27% D + 12:45 PM ezto.mheducation.com The accountant for Erica\'s Dress Sh

Question

Pad * 27% D + 12:45 PM ezto.mheducation.com The accountant for Erica's Dress Shop prepared the following cash budget. Erica's desires to maintain a cash cushion of $24,000 at the end of each month. Funds are assumed to be borrowed and repaid on the last day of each month. Interest is charged at the rate of 3 percent per month. Required a. Complete the cash budget by filling in the missing amounts. (Any repayments should be indicated with a minus sign. Round your answers to the nearest whole dollar amount.) Cash Budget July August September Section 1: Cash receipts Beginning cash balance47,50024,000s 24,000 Add cash receipts 0000210,000 250600 Total cash available 237,500 234,000274,600 Section 2: Cash payments 170,526 For inventory purchases For S&A; expenses For interest expense 45230179.152 59,50065,50 66,432 Total budgeted disbursements 230,026 Section 3: Financing activities Surplus (shortage) Borrowing (repayments) 7,474 16,526 24,000 24,000 24,000 Ending cash balance b. Determine the amount of net cash flows from operating activities Erica's will report on the third quarter pro forma statement of cash flows. (Enter any cash outflows with a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.) Net cash

Explanation / Answer

Cash Budget July August September Section 1 : Cash Receipts Beginning cash Bal 47500 24000 24000 Add cash receipts 190000 210000 250600 total cash available 237500 234000 274600 Section 2: Cash Payments For inventary purchase 170526 145230 179152 For S&A expenses 59500 65560 66432 For Interest Expense 496 534 Total Budgeted disbursements 230026 211286 246118 Section 3: Financing activities Surplus (shortage) 7474 22714 28482 Borrrowings ( repayments) 16526 1286 -4482 Ending cash Balance 24000 24000 24000 Interest = Last month borrowings * 3% 16529*3% - 496 16529+1286*3% -534

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