Cash Budget The following budget estimates have been prepared by Clifton Company: Cash Receipts - May $120,000 June $110,300 Cash Payments - May $150,000 June $150,000 The company likes to maintain a minimum cash balance of $40,000. Any excess cash is invested in a money market account earning 9% 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% interest with the local bank. Interest is paid monthly. Assume a cash balance on May 1 of $40,000, a money market account balance of $0, and a credit line balance of $0. Required: Prepare a cash budget for May and June. Use the attached spreadsheet.
The following budget estimates have been prepared by Clifton Company:
Cash Receipts - May $120,000 June $110,300
Cash Payments - May $150,000 June $150,000
The company likes to maintain a minimum cash balance of $40,000. Any excess cash is invested in a
Assume a cash balance on May 1 of $40,000, a money market account balance of $0, and a credit line balance of $0.
Required:
Prepare a cash budget for May and June. Use the attached spreadsheet.
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