[kluyste1]

I need to prepare a cash budget but am not sure how to complete one of the information sections.

The firm will purchase a new bottling machine for $1,000,000 on September 30, 2011. The equipment purchase will be financed using a 5 year loan. The interest rate on the loan is expected to be 8% per year at the time of the purchase. The new machine will be depreciated using the straight line method for 10 years. At the end of its useful life, the machine will have no salvage value.

The interests on the company's bonds are accrued monthly. The interests are paid semiannually on January 31 and July 31 for the preceding 6 month period.

The layout for the cash budget provided for our assignment is

July August September Third Quarter
Cash Receipts 826,200 867,510 910,885.50 2,604,595.50
Cash Disbursement (766,323.33) (703,017.99) (706,848.79) (2,176,190.11)
Change in cash 59,876.67 164,492.01 204,036.71 428,405.39
Other cash inflows:
Proceeds from bank loan
Other cash outflows:
Purchase of machine - - (1,000,000) (1,000,000)
Interest on bonds
Dividend Payment - - (100,000) (100,000)
Change in cash balance
Cash balance, beginning
Cash balance, end


Thanks for any help on how to calculate the needed items.