Garden Depot is a retailer that is preparing its budget for the upcoming fiscal
ID: 2343009 • Letter: G
Question
Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year Management has prepared the following summary of its budgeted cash flows Total cash receipts Total cash disbursements 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter S 280,000 430,000 310,000 330,000 S 330,000 $ 300,000290,000 $ 310,000 The company's beginning cash balance for the upcoming fiscal year will be $40,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded Required Prepare the company's cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.) Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess of cash available over disbursements Financing Borrowings Total financing Ending cash balanceExplanation / Answer
GARDEN DEPOT
Cash Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Beginning Cash balance
$ 40,000.00
$ 10,000.00
$ 118,800.00
$ 138,800.00
$ 40,000.00
Total Cash receipts
$ 280,000.00
$ 430,000.00
$ 310,000.00
$ 330,000.00
$ 1,350,000.00
Total Cash available
$ 320,000.00
$ 440,000.00
$ 428,800.00
$ 468,800.00
$ 1,390,000.00
Total Cash Disbursements
$ (330,000.00)
$ (300,000.00)
$ (290,000.00)
$ (310,000.00)
$ (1,230,000.00)
Excess of cash available over disbursements
$ (10,000.00)
$ 140,000.00
$ 138,800.00
$ 158,800.00
$ 160,000.00
Short term Finance:
Borrowings
$ 20,000.00
$ 20,000.00
Repayments
$ (21,200.00)
$ (21,200.00)
Interest
$ 600.00
$ 600.00
$ 1,200.00
Total Financing
$ 20,600.00
$ (20,600.00)
$ -
Cash balance , Ending
$ 10,000.00
$ 118,800.00
$ 138,800.00
$ 158,800.00
$ 158,800.00
Loan Statement
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Beginning balance of loan
$ 20,600.00
New loan
$ 20,000.00
$ -
$ 20,000.00
Repayments
$ -
$ (21,200.00)
$ (21,200.00)
Interest
$ 600.00
$ 600.00
$ 1,200.00
Ending Balance of Loan
$ 20,600.00
$ -
$ -
$ -
$ -
Interest on loan of $20000 will be paid for two quarters that is quarter 1 and 2.
GARDEN DEPOT
Cash Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Beginning Cash balance
$ 40,000.00
$ 10,000.00
$ 118,800.00
$ 138,800.00
$ 40,000.00
Total Cash receipts
$ 280,000.00
$ 430,000.00
$ 310,000.00
$ 330,000.00
$ 1,350,000.00
Total Cash available
$ 320,000.00
$ 440,000.00
$ 428,800.00
$ 468,800.00
$ 1,390,000.00
Total Cash Disbursements
$ (330,000.00)
$ (300,000.00)
$ (290,000.00)
$ (310,000.00)
$ (1,230,000.00)
Excess of cash available over disbursements
$ (10,000.00)
$ 140,000.00
$ 138,800.00
$ 158,800.00
$ 160,000.00
Short term Finance:
Borrowings
$ 20,000.00
$ 20,000.00
Repayments
$ (21,200.00)
$ (21,200.00)
Interest
$ 600.00
$ 600.00
$ 1,200.00
Total Financing
$ 20,600.00
$ (20,600.00)
$ -
Cash balance , Ending
$ 10,000.00
$ 118,800.00
$ 138,800.00
$ 158,800.00
$ 158,800.00
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