Answer and Explanation:
The preparation of cash budget for July, August and September is shown below:-
July August September
Beginning cash balance $8,400 $8,000 $8,000
Add:
Cash receipts $20,000 $26,000 $40,000
Total cash available $28,400 $34000 $48000
Less:-
Cash payments $28,000 $30,000 $22,000
Less:-
Interest on bank loan 0 $76 $117
Preliminary cash balance $400 $3,924 $25,883
Additional loan(loan repayment) $7,600 $4,076 -$11,676
Ending cash balance $8,000 $8,000 $14,207
Loan balance
Loan balance -Beginning of month 0 $7,600 $11,676
Additional loan(loan repayment) $7,600 $4,076 -$11,676
loan balance-end of month $7,600 $11,676 0
Working note
Interest = $7600 × 1% = $76
Interest = $11,676 × 1% = $117
Therefore for making cash budget we simply added all the receipts and less all the payments.