Find the unknowns in Big Chuck abbreviated cash budget

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Reference no: EM132460236

Problem - An abbreviated cash budget for Big Chuck Enterprises follows:

 

July

August

September

Beginning cash balance

$10,000

$?

$?

Add: Cash receipts

50,000

63,000

71,000

Deduct: Cash payments

(64,000)

(58,000)

(64,000)

Cash excess (deficiency) before financing

$(4,000)

$?

$?

Financing Borrowing to maintain minimum balance

?

?

?

Principal repayment

?

?

?

Interest payment

?

?

?

Ending cash balance

$?

$?

$?

Big Chuck wants to maintain a $10,000 minimum cash balance at all times. Additional financing is available (and retired) in $1,000 multiples at a 12% interest rate. Assume that borrowings take place at the beginning of the month; retirements, in contrast, occur at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid.

Required -

a. Find the unknowns in Big Chuck's abbreviated cash budget.

b. Determine the outstanding loan balance as of September 30, after any repayments have been made.

Reference no: EM132460236

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