Question

e. cash payments for overhead, $35,000.
f. cash payments for sales commissions, $7,000
g. cash payments for interest, $160 (1% of beginning loan balance of $16,000)
h. cash repayment of loan, $16,000.

prepare a cash budget for march for gado company.

answer is not complete.

gado company
cash budget
march

beginning cash balance: $78,000
add: cash receipts from sales: 305,000
total cash available: 383,000
less: cash payments for
direct materials: 133,000
direct labor: 78,000
overhead: 35,000
sales commissions: 7,000
total cash payments: 253,000
preliminary cash balance: $130,000
loan activity
interest on loan
ending cash balance: 130,000
loan balance, end of month

Explanation:

Identify the missing and incorrect entries

Using the Cash Budget Structure knowledge point
The image shows a partially completed Cash Budget for Gado Company for the month of March. The system flags the answer as "not complete" and marks the "Interest on loan" row with a red "X". We need to fill in the remaining fields under "Loan activity" and calculate the final "Ending cash balance" and "Loan balance, end of month".

The given items from the top of the image are:

• g. Cash payments for interest, \$160 (1% of beginning loan balance of \$16,000)
• h. Cash repayment of loan, \$16,000.

Calculate the loan activity and interest payment

Using the Financing Activity and Cash Budgeting knowledge points

• Interest on loan: The interest payment is given as \$160. Since this is a cash outflow, it should be entered as a deduction in the loan activity section: \(160\) (or represented as a negative/subtracted value depending on the budget format, but usually entered as a positive payment value if the section subtracts it, or explicitly as \(160\) to reduce the preliminary balance).
• Loan repayment: The principal repayment is \$16,000.
• Total financing/loan activity effect:

$$ \text{Interest on loan} = 160 $$

$$ \text{Loan repayment} = 16,000 $$

Calculate the final ending cash balance

Using the Cash Budgeting knowledge point

• Preliminary cash balance: \$130,000
• Less: Interest paid: \$160
• Less: Loan principal repaid: \$16,000
• Ending cash balance:

$$ \text{Ending cash balance} = 130,000 - 160 - 16,000 = 113,844 $$

Let's double check the arithmetic:

$$ 130,000 - 16,160 = 113,840 $$

Determine the ending loan balance

Using the Financing Activity knowledge point

• Beginning loan balance: \$16,000
• Principal repayment: \$16,000
• Ending loan balance:

$$ \text{Loan balance, end of month} = 16,000 - 16,000 = 0 $$

Answer:

To complete the cash budget for Gado Company, fill in the remaining rows in the table as follows:

Row	Value
Loan repayment	\$16,000
Ending cash balance	\$113,840
Loan balance, end of month	\$0