Foyert Corp. requires a minimum $6,800 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $6,800 and the company has an outstanding loan of $2,800. 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 $22,800 $16,800 $20,800
Cash payments 25,200 15, 800 15,200
Prepare a cash budget for October, November, and December.
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