Reference no: EM133170043
Question - Prepare the cash budget for the first quarter.
Assume the following:
1. Alberto started the year with $17,700.00 in it's bank account and must maintain a cash balance of $11,000.00 at the end of each month.
2. Alberto's has access to an open line of credit with the bank to borrow if needed. To keep things simple, ignore interest calculations on the bank borrowings. Also, loan borrowings are taken in multiples of $1,000.00
3. Alberto's maintains that it will repay loans as soon as possible with any excess cash that becomes available.
4. Alberto's has budgeted the following:
Payment for operating expenses = $97,600.00 each month.
Depreciation expense is $6,800 per month.
Alberto's will need to purchase new ovens. The total cost of the ovens is $185,000.00 Alberto's will pay $130,000.00 in January and the remainder in February.
Cash Dividends of $14,400.00 will be paid to shareholders in February and March.
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