Reference no: EM132896843

Question - Baird Medical Clinic has budgeted the following cash flows:

Jan Feb March

Cash receipts $102,000 $108,000 $128,000

Cash payments

For inventory purchases 91,000 73,000 86,000

For S&A expenses 32,000 33,000 28,000

Baird Medical had a cash balance of $9,000 on January 1. The company desires to maintain a cash cushion of $7,000. Funds are assumed to be borrowed, in increments of $1,000, and repaid on the last day of each month; the interest rate is 3 percent per month. Repayments may be made in any amount available. Baird pays its vendors on the last day of the month also. The company had a monthly $40,000 beginning balance in its line of credit liability account from this year's quarterly results.

Required - Prepare a cash budget.