Camden borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 1 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $6,000 cash cushion. Prepare a cash budget.

Haas borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 1 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $16,000 cash cushion.

Cash Budget

October November December

Beginning cash balance

Plus: Cash receipts 157,500 481,500 577,800

Cash available 157,500 481,500 577,800

Less: Payments

For inventory purchases 235,755 364,221 354,588

Selling & Administrative expenses 40,200 62,200 69,400

Purchase of store fixtures 170,000 0 0

Interest expenses 0 3,050 2,554

Total Budgeted payment 445,955 429,471 426,152

Surplus (shortage) (288,455) 52,029 151,648

Financing activity

Borrowing repayment ? ? ?

What is the payment borrowed?

Explanation:

All working forms part of the answer Please note that Amount to be borrowed will be in increments of $ 1,000, BUT it is mentioned that repayments can be made in “ANY AMOUNT”.