The Following Budget Estimates Have Been Prepared by Flowers Company

question 66

Essay

The following budget estimates have been prepared by Flowers Company: The company likes to maintain a minimum cash balance of £50,000.
Any excess cash is invested in a money market account earning 8 per cent compounded monthly. Interest is reinvested in the money market account. Any cash deficiencies are covered by a withdrawal from the money market account. If additional cash is needed, the company has a line of credit at 12 per cent interest with the local bank.
Assume a cash balance on January 1 of £50,000, a money market account balance of £0, and a credit line loan balance of £0.
Required:
Prepare a cash budget for each of the first three months of the year.

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Definitions:

Recall Notice

An announcement issued by a manufacturer or regulatory agency to inform consumers about a defect or safety concern with a product and instructions for fixing or returning it.

Appointment Card

A card given to patients by medical providers with details of their next scheduled appointment.

Self-Address

The process of directing communication or packages to oneself, usually by providing one's own address as both the sender and recipient.

Reminder Call

A phone call or digital notification sent to prompt or remind someone of an upcoming event or deadline.