eliminary cash balance of more than $8,120 at month-end is used to repay loans. Budgeted cash receipts (other than for loar ceived) and budgeted cash payments (other than for interest or loan payments) follow. Cash receipts (other than for loans received) Cash payments (other than for interest or loan payments) eginning cash balance dd: Cash receipts otal cash available dd: Cash payments for Interest on loan Cash payments Total cash payments reliminary cash balance epare a cash budget for June, July, and August. te: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round final answers t earest whole dollar. Dan activity Additional loan (loan repayment) nding cash balance Dan balance, Beginning of month dditional loan (loan repayment) ban halance End of month Cash Budget $ $ June $ Loan balance $ S 9,520 $ 26.200 35,720 0 30,700 30,700 5,020 $ 3,100 8,120 $ 0 $ ol July 8,120 $ 32,200 40,320 14 32,214 32,228 8,092 28 8,120 June $ 26,200 30,700 0 28 August 8,120 34,200 42,320 July $ 34,200 32,200 0 August $ 42,200 34,200

The cash budget is prepared to record cash receipts and cash payments during the period. It helps to…

Answered: eliminary cash balance of more than $8,120 at month-end is used to repay loans. Budgeted cash receipts (other than for loar ceived) and budgeted cash payments…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

A10

A company has a cash balance on June 1 of $9,520 and has no outstanding loans. The company requires a minimum $8,120 cash
balance at each month-end. Loans taken to keep this minimum balance require payment of 1% interest at each month-end. Any
preliminary cash balance of more than $8,120 at month-end is used to repay loans. Budgeted cash receipts (other than for loans
received) and budgeted cash payments (other than for interest or loan payments) follow.
Cash receipts (other than for loans received)
Cash payments (other than for interest or loan payments)
Beginning cash balance
Add: Cash receipts
Total cash available
Add: Cash payments for
Interest on loan
Cash payments
Total cash payments
Preliminary cash balance
Prepare a cash budget for June, July, and August.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round final answers to the
nearest whole dollar.
Loan activity
Additional loan (loan repayment)
Ending cash balance
Loan balance, Beginning of month
Additional loan (loan repayment)
Loan balance, End of month
Cash Budget
$
$
June
$
Loan balance
$
$
9,520 $
26,200
35,720
0
30,700
30,700
5,020
$
3,100
8,120 $
0 $
or
July
8,120 $
32,200
40,320
14
32,214
32,228
8,092
28
8,120
June
$ 26, 200
30,700
0
28
August
8,120
34,200
42,320
July
$ 34,200
32,200
0
August
$ 42,200
34,200

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