Prepare a cash budget for June. Donald Company has the following information: Cash Balance, May 31-45,000 Dividends
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Question:
Prepare a cash budget for June.
Donald Company has the following information:
Cash Balance, May 31-45,000
Dividends paid in June- 12,000
Cash paid for operating expenses in June-39,600
Equipment depreciation expense in June-4,500
Patent amortization expense in June-2,000
Cash collections on sales in June- 89,000
Merchandise purchases paid in June -56,200
Purchase equipment for cash in June- 17,500
Donald Company wants to keep a minimum cash balance of $10,000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. The interest of 1% is paid in cash at the end of each month when debt is outstanding. Borrowing and repayments are carried out in multiples of $1,000.
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