Preparing a Cash Budget
McBride Medical Clinic has budgeted the following cash flows.
For inventory purchases
For S&A expreses
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.
Prepare a cash budget. (Round all computations to the nearest whole dollar).