When completing the cash budget, remember to include the equipment that was purchased for $680,000 as noted in part e.

Valley had no cash as of December 31, 2020. Valley has access to a line of credit. Valley borrows and prepays from the line of credit on the last day of the month in increments of $3,000. It pays interest of 1.8% per month in cash on the last day of the month. There was no budgeted interest expense for January since no amount would be borrowed until January 31, 2021. Company policy is to maintain an ending cash balance of at least $28,000. Use this information and the budgets prepared in parts b, d, and f to prepare a cash budget.

Part g.
7. Cash Budget
Desired Ending Cash Balance	28,000	Interest on Line of Credit		1.8%/month
	Jan	Feb	Mar	Total for Qtr
Cash Receipts
Beginning Cash Balance	-	-	-
Add Cash Receipts	1,317,840	3,599,784	3,959,762	8,877,386
Total Cash Available	1,317,840	3,599,784	3,959,762
Cash Payments
For Inventory Purchases	1,340,072	2,755,050	2,863,431	6,958,553
For S&A Expenses	837,000	1,114,440	1,142,184	3,093,624
For Interest Expense*	-	-		-
To Purchase Equipment	680,000	-	-	680,000
Total Budgeted Payments	2,857,072	3,869,490	4,005,615
Financing Activities
Surplus (Shortage)
Borrowing (Repayment)
Ending Cash Balance