Acc200-McBride Medical Clinic has budgeted the following cash flows. 1 answer below »

Preparing a Cash Budget

McBride Medical Clinic has budgeted the following cash flows.

January

February

March

Cash receipts

101,000

108,000

125,000

Cash payments:

For inventory purchases

92,000

72,000

83,000

For S&A expreses

30,000

32,000

26,000

McBride Medical had a cash balance of $7,000 on January 1. The company desires to maintain a cash cushion of $5,000. Funds are assumed to be borrowed, in increments of $1,000 and repaid on the last day of each month; the interest rate is 1 percent per month. McBride pays its vendor on the last day of the month also. The company had a $30,000 beginning balance in its line of credit liability account.

Required:

Prepare a cash budget. (Round all computations to the nearest whole dollar).

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