Blue Devil Inc. expects the following cash receipts and disbursements during the first quarter of 2021 (receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1, 2021): January February March Cash Receipts $430,000 $440,000 $400,000 Cash Disbursements $390,000 $520,000 $420,000 The expected cash balance at January 1, 2021, is $75,000. Blue Devil Inc. wants to maintain a cash balance at the end of each month of at least $60,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Required: Prepare a cash budget for the quarter ended March 31, 2021 using the following Table. Blue Devil Inc. Cash Budget For the quarter ended on March 31, 2021 January February March Beginning cash balance Cash receipts Short-term borrowings Cash available Cash disbursements Interest payments Total cash disbursements Ending cash balance
Blue Devil Inc. expects the following cash receipts and disbursements during the first quarter of 2021 (receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1, 2021):
| January | February | March | |
| Cash Receipts | $430,000 | $440,000 | $400,000 |
| Cash Disbursements | $390,000 | $520,000 | $420,000 |
The expected cash balance at January 1, 2021, is $75,000. Blue Devil Inc. wants to maintain a cash balance at the end of each month of at least $60,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month.
Required:
Prepare a
Blue Devil Inc.
Cash Budget
For the quarter ended on March 31, 2021
| January | February | March | |
| Beginning cash balance | |||
| Cash receipts | |||
| Short-term borrowings | |||
| Cash available | |||
| Cash disbursements | |||
| Interest payments | |||
| Total cash disbursements | |||
| Ending cash balance |
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