Foyert Corporation requires a minimum $7,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $7,400 is used to repay loans at month-end. The cash balance on October 1 is $7,400, and the company has an outstanding loan of $3,400. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Cash receipts Cash payments October $ 23,400 26,100 Beginning cash balance Add: Cash receipts Total cash available Add: Cash payments for All items excluding interest All items excluding interest. Total cash payments Preliminary cash balance Loan activity Ending cash balance. Prepare a cash budget for October, November, and December. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) November $ 17,400 16,400 Loan balance - Beginning of month December $ 21,400 14,600 FOYERT CORPORATION Cash Budget $ October Loan balance $ 7,400 $ 23,400 30,800 34 4,666 4,700 November 3,400 7,400 $ 17,400 24,800 61 December 61 7,400 21,400 28,800 52 52

Foyert Corporation requires a minimum $7,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $7,400 is used to repay loans at month-end. The cash balance on October 1 is $7,400, and the company has an outstanding loan of $3,400. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Cash receipts Cash payments October $ 23,400 26,100 Beginning cash balance Add: Cash receipts Total cash available Add: Cash payments for All items excluding interest All items excluding interest. Total cash payments Preliminary cash balance Loan activity Ending cash balance. Prepare a cash budget for October, November, and December. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) November $ 17,400 16,400 Loan balance - Beginning of month December $ 21,400 14,600 FOYERT CORPORATION Cash Budget $ October Loan balance $ 7,400 $ 23,400 30,800 34 4,666 4,700 November 3,400 7,400 $ 17,400 24,800 61 December 61 7,400 21,400 28,800 52 52

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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