You recently began a job as an accounting intern at Backyard Adventures. Your first task was to prepare the cash budget for February and March. Unfortunately, the computer with the budget file crashed, and you did not have a backup or even a hard copy. You ran a program to salvage bits of data from the budget file. After entering the following data in the budget, you may have just enough information to reconstruct the budget. Backyard Adventures eliminates any cash deficiency by borrowing the exact amount needed from State Street Bank, where the current interest rate is 6%. Backyard Adventures pays interest on its outstanding debt at the end of each month. The company also repays all borrowed amounts at the end of the month as cash becomes available. Requirements: Complete the following cash budget. (For amounts with a $0 balance, make sure to enter “0” in the appropriate input field. Enter cash deficiencies with a minus sign or parentheses. Enter the net total effects of financing with a minus sign when the amount is a net outflow. Round interest expense to the nearest whole dollar.) Backyard Adventures Combined Cash Budget February and March February Beginning cash balance $16,600 Plus: Cash collections ? Plus: Cash from sale of plant assets 0 Total cash available $107,000 Less: Cash payments (purchase inventory) ? Less: Cash payments (operating expenses) 47,400 Total cash payments $97,900 (1) Ending cash balance before financing ? Minimum cash balance desired 24,000 Cash excess (deficiency) ? Financing: ? Plus: New borrowings ? Less: Debt repayments ? Less: Interest payments ? (2) Total effects of financing ? Ending cash balance (1) + (2) ?
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