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Crane Company is preparing a cash summary budget using the data below. They have already prepared...

Crane Company is preparing a cash summary budget using the data below. They have already prepared their cash receipts and cash payments budget so that data is provided: October November Beginning Cash Balance $16000 Expected Cash Receipts $63000 $95000 Expected Cash Payments $45000 $76000

Management always wants to maintain a $38,714 minimum cash balance at the end of every month. If there is an expected cash shortfall in the budget they will be proactive and borrow money at the first day of the month. That way they will not risk having too low of a balance during the month. They can borrow any amount of money needed. They may not pay loans back in installments. They have to pay them back all at once. The interest rate is 12%. Assume if they pay back money, they pay it back on the last day of the month.

What is the ending cash balance for November after all loan repayments of principle and interest? Round your answer to the nearest whole dollar.

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Answer #1
Cash Budget
Particulars October November
Beginning cash balance $      16,000 $          38,714
Add: Cash receipts $      63,000 $          95,000
Total cash available $      79,000 $      1,33,714
Less: Cash payments $      45,000 $          76,000
Excess / (deficiency) of cash $      34,000 $          57,714
Financing:
Borrowings $         4,714
Repayments $               -   $          -4,714
Interest $               -   $                -94
Total financing $         4,714 $          -4,808
Ending cash balance $      38,714 $          62,522

Ending cash balance for November is $ 62522

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