Garden Depot is a retailer that is preparing its budget for the upcoming fiscal

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: The company's beginning cash balance for the upcoming fiscal year will be $33,800. The company requires a minimum cash balance of $10,800 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.8%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans at the end of any quarter Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies, repayments, interest, and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Round interest amounts to the nearest whole number. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Explanation / Answer

Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Cash Balance Beginning $ 33,800.00 $ 10,800.00 $ 90,016.00 $ 103,016.00 $ 33,800.00 Total Cash Receipt $ 197,000.00 $ 331,000.00 $ 222,000.00 $ 231,000.00 $ 981,000.00 Total Cash Available $ 230,800.00 $ 341,800.00 $ 312,016.00 $ 334,016.00 $ 1,014,800.00 less: Total cash Disbursement $ 248,000.00 $ 223,000.00 $ 209,000.00 $ 237,000.00 $ 917,000.00 Excess (deficiency)of cash available $ (17,200.00) $ 118,800.00 $ 103,016.00 $ 97,016.00 $ 97,800.00 over disbursement Financing Borrowing (at beginnings of quarter) $ - $ 28,000.00 $ - $ - Repayment (at end of quarter) $ - $ 28,000.00 $ - $ - Interest $ - $ 784.00 $ - $ - $ 784.00 Total Financing $ 28,000.00 $ - $ - $ - Cash Balance ending $ 10,800.00 $ 90,016.00 $ 103,016.00 $ 97,016.00 $ 97,016.00

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