HOPPY COMPANY Cash Budget For the Three Months Ended March 31 January February March Total Beginning balance Cash receipts 3,500 19,000 27,500 42,000 88,500 Cash available 22,500 Cash payments All expenses except interest 34,000 35,000 39,000 108,000 Interest expense Total cash payments 34,000 Ending balance before financing Minimum cash balance desired (3,500) (3,500) (3,500) (3,500) Projected cash eNcess (deficiency) Financing: Borrowing Principal repayments Total effects of financing Ending cash balance

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 6PA: Relevant data from the Poster Companys operating budgets are: Additional data: Capital assets were...
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Preparing the financial budget——cash budget

Hoppy Company requires a minimum cash balance of $3,500. When the company expects a cash deficiency, it borrows the exact amount required on the first of the month. Expected excess cash is used to repay any amounts owed. Interest owed from the previous month’s principal balance is paid on the first of the month at 14% per year. The company has already completed the budgeting process for the first quarter for cash receipts and cash payments for all expenses except interest. Hoppy does not have any outstanding debt on January l. Complete the cash budget for the first quarter for Hoppy Company. Round interest expense to the nearest whole dollar.

HOPPY COMPANY
Cash Budget
For the Three Months Ended March 31
January February
March
Total
Beginning balance
Cash receipts
3,500
19,000
27,500
42,000
88,500
Cash available
22,500
Cash payments
All expenses except interest
34,000
35,000
39,000
108,000
Interest expense
Total cash payments
34,000
Ending balance before financing
Minimum cash balance desired
(3,500)
(3,500)
(3,500)
(3,500)
Projected cash eNcess (deficiency)
Financing:
Borrowing
Principal repayments
Total effects of financing
Ending cash balance
Transcribed Image Text:HOPPY COMPANY Cash Budget For the Three Months Ended March 31 January February March Total Beginning balance Cash receipts 3,500 19,000 27,500 42,000 88,500 Cash available 22,500 Cash payments All expenses except interest 34,000 35,000 39,000 108,000 Interest expense Total cash payments 34,000 Ending balance before financing Minimum cash balance desired (3,500) (3,500) (3,500) (3,500) Projected cash eNcess (deficiency) Financing: Borrowing Principal repayments Total effects of financing Ending cash balance
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