Slim CorpRequires a Minimum $8,000 Cash Balance

question 99

Essay

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 for loans received for July,August,and September are forecasted as $24,000,$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.
Required:
Prepare a cash budget for July,August,and September.

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Definitions:

Devastating Catastrophe

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