Reference no: EM131821408

Assignment

Prepare for StartUp Company, in good form and without abbreviations, a cash budget for the month of January, 2015.

StartUp Company has asked you to prepare a cash budget for the month of January 2015, using the following information:

Projected cash balance at December 31, 2014, $2,000

Minimum cash balance desired January 31, 2015, $4,000.

Minimum cash balance desired, December 31, 2015, $8,000

Projected transactions in January are:

Cash collections from sales                                                      $ 25,000

Cash from tax refund                                                              14,000

Purchases of merchandise inventory                                          10,000

Selling and administrative expenses (excluding depreciation)          25,000

Depreciation of building and equipment                                      15,000

Purchases of store equipment (one-half to be paid in February)     40,000

Declaration of a dividend (100% to be paid in February)               12,000

Amortization of patents                                                          11,000

Where a projected transaction involves a cash outlay, unless otherwise noted the cash will be paid in January.

The company has a line of credit at the bank, which allows borrowing up to $100,000. Since March 2014, the company has had loans of $30,000 outstanding at 12% interest. Interest is payable quarterly on March 31, June 30, September 30, and December 31.