Gibson Medical Clinic has budgeted the following cash flows. Cash receipts January $ 108,000 February $ 114,000 March $ 134,000 Cash payments For inventory purchases For S&A expenses 94,000 35,000 76,000 36,000 89,000 31,000 Gibson Medical had a cash balance of $12,000 on January 1. The company desires to maintain a cash balance of $7,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Gibson pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results. Required Prepare a cash budget. Note: Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/ shortage should be indicated with a minus sign. Cash Budget Section 1: Cash Receipts Total cash available Section 2: Cash Payments Total budgeted disbursements Section 3: Financing Activities January February March

Gibson Medical Clinic has budgeted the following cash flows. Cash receipts January $ 108,000 February $ 114,000 March $ 134,000 Cash payments For inventory purchases For S&A expenses 94,000 35,000 76,000 36,000 89,000 31,000 Gibson Medical had a cash balance of $12,000 on January 1. The company desires to maintain a cash balance of $7,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Gibson pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results. Required Prepare a cash budget. Note: Round intermediate and final answers to the nearest whole dollar amounts. Any repayments/ shortage should be indicated with a minus sign. Cash Budget Section 1: Cash Receipts Total cash available Section 2: Cash Payments Total budgeted disbursements Section 3: Financing Activities January February March

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Fairview Medical Supply has applied for a loan. First American Bank has requested a budgeted balance sheet as of April 30, and a combined cash budget for April. As Fairview Medical Supply's controller, you have assembled the following information: a. March 31 equipment balance, $52,700; accumulated depreciation, $41,100. b. April capital expenditures of $42,700 budgeted for cash purchase of equipment. c. April depreciation expense, $500. d. Cost of goods sold, 60% of sales. e. Other April operating expenses, including income tax, total $13,400, 30%of which will be paid in cash and the remainder accrued at April 30. f. March 31 owners' equity, $93,600. g. March 31 cash balance, $40,100. h. April budgeted sales, $91,000, 70% of which is for cash. Of the remaining 30%, half will be collected in April and half in May. i. April cash collections on March sales, $29,200. j. April cash payments of March 31 liabilities incurred…