Slim Corp Requires a Minimum $8,000 Cash Balance

question 105

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:

Stakeholder

An individual or group that has an interest or concern in an organization or project, and whose input or involvement can affect or be affected by the outcome.

Corporate Director

A member of the board of directors of a corporation, elected by shareholders, responsible for making major business and policy decisions.

Shareholder Proposal

A formal recommendation or motion put forward by a shareholder for consideration and action by the board of directors and other shareholders at a company's annual general meeting or a special meeting.

Voting Stock

Shares of a company’s stock that grant the shareholder the right to vote on corporate governance issues and board member elections.