Solution-Prepare a cash budget for May and June

Prepare a cash budget for May and June

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Reference no: EM132781524

Question - The following budget estimates have been prepared by Clifton Company:

	Cash Receipts	Cash Payments
May	$120,000	$150,000
June	$110,300	$150,000

The company likes to maintain a minimum cash balance of $40,000.

If additional cash is needed, the company has a line of credit at 12 percent interest with the local bank. Interest is paid monthly. Monthly loan interest incurred in the month will be paid on the first day of the following month.

Assume a cash balance on May 1 of $40,000.

Required -

A. Prepare a cash budget for May and June.

B. Calculate the total loan outstanding at the end of June and total interest incurred for the two month period, May and June?

Reference no: EM132781524

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Prepare a cash budget for May and June

Reference no: EM132781524

Reference no: EM132781524

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