Brewster Corporation expects the following cash receipts and disbursements during the first quarter of 2019 (receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1, 2019) : Cash receipts January February March
$260,000 $280,000 $250,000
Cash disbursements
240,000 320,000 260,000
The expected cash balance at January 1, 2019, is $42,000. Brewster wants to maintain a cash balance at the end of each month of at least $40,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31, 2019.
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