AccountingBLOCK

Slim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Loans are repaid at month's end from any excess cash. The cash balance on July 1 is $8,400. Cash receipts other than loans received for July, August, September are forecasted as $24,00, $32,000 and $40,000 respectively. Payments other than for loan or interest payments for the same period are planned at $28,000, $30,000, and $32,000 respectively at July 1, there are no outstanding loans.

We are required to prepare a cash budget for july, august, and september.

I have no idea how to do this.. any help would be great! thanks!

JULY
Beginning cash balance: $8,400

Add
- Cash Receipts $24,000
Total: $32,400

Deduct
- Payments: $28,000

Total: $4,400

To meet minimum requirement of $8,000 you borrow $3,600 at 1% Interest.

AUGUST
Beginning cash Balance: $8,000

Add
- Cash Receipts: $32,000
Total: $40,000

Deduct
- Payments: $30,000
- 1% Interest: $36

Total: $9,964

No borrowing is required because the minimum requirement of $8000 has been met.

SEPTEMBER
Beginning cash Balance: $9,964

Add
- Cash Receipts: $40,000
Total: $49,964

Deduct
- Payments: $32,000

Total: $17,964

No borrowing is required because the minimum requirement of $8000 has been met.

__________________
Owner Zindah, Inc.
A.A Accounting
B.S Accounting