Question

Oscar Fox, the accounting manager of Onaka Antique Company, is preparing his company’s cash budget for the next quarter. Onaka desires to maintain a cash cushion of $2,000 at the end of each month. As cash flows fluctuate, the company either borrows or repays funds at the end of a month. It pays interest on borrowed funds at the rate of 1 percent per month.

Cash Budget	July	August	September
Section 1: Cash Receipts
Beginning cash balance	$ 10,000	$   ?	$    ?
Add cash receipts	90,000	96,000	104,000
Total cash available (a)	100,000	?	?
Section 2: Cash Payments
For inventory purchases	81,000	76,500	85,500
For S&A expenses	18,500	18,000	19,500
For interest expense	0	?	?
Total budgeted disbursements (b)	99,500	?	?
Section 3: Financing Activities
Surplus (shortage)	500	?	?
Borrowing (repayments) (c)	1,500	?	?
Ending Cash Balance (a − b + c)	$ 2,000	$ 2,000	$      2,000

Required

1. Complete the cash budget by filling in the missing amounts. Round all computations to the nearest whole dollar.
2. Determine the amount of net cash flows from operating activities Onaka will report on its quarterly pro forma statement of cash flows.
3. Determine the amount of net cash flows from financing activities Onaka will report on its quarterly pro forma statement of cash flows.

Answer 1