Foyert Corp. requires a minimum $7,500 cash balance. If necessary, loans are taken to meet this requirement at a cost of 2% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $7,500 and the company has an outstanding loan of $3,500. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow.
|
October |
November |
December |
| Cash receipts |
$ |
23,500 |
$ |
17,500 |
$ |
21,500 |
| Cash disbursements |
|
26,250 |
|
16,500 |
|
14,500 |
|
Prepare a cash budget for October, November, and December.