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History Bookmarks Window Help inbox (4,555- Saved Help Sa ework (Algorithmic 6 Exercise 8-11 Cash Budget Analysis [LO8-8 A cash budget, by quarters is given below for a retail company OOO omitted). The company requires a minimum cash least $3,000 to start each quarter. Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash defi Repayments should be indicated by a minus sign.) Quarter (000 omitted) Cash balance, beginning Add collections from customers Total cash available Less disbursements 400 94 Purchase of inventory Selling and administrative expenses Equipment purchases 49 59 45 30 130 12 24 Total disbursements Excess (deficiency) of cash available over disbursements 115 17 Repayments (including interest) Total financing Cash balance, ending interest will total $1,000 for the year (20)

Explanation / Answer

Solution:

Here is the missing figures:

Quarter (000 omitted)

Year

1

2

3

4

Cash balance, beginning

$8

$3

$3

$3

$8

Add Collection from customers

$86

$98

$110

$106

$400

Total cash available

$94

$101

$113

$109

$408

Less: disbursements

Purchase of inventory

$49

$59

$52

$33

$193

Selling and administrative expenses

$32

$45

$30

$23

$130

Equipment purchases

$12

$9

$24

$10

$55

Dividends

$2

$2

$2

$2

$8

Total disbursements

$95

$115

$108

$68

$386

Excess (deficiency) of cash available over disbursements

-$1

-$14

$5

$41

$22

Financing:

Borrowings

$4

$17

$0

$0

$21

Repayments (including interest)

$0

$0

-$2

-$20

-$22

Total Financing

$4

$17

-$2

-$20

-$1

Cash balance, ending

$3

$3

$3

$21

$21

*Interest will total $1,000 for the year

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Quarter (000 omitted)

Year

1

2

3

4

Cash balance, beginning

$8

$3

$3

$3

$8

Add Collection from customers

$86

$98

$110

$106

$400

Total cash available

$94

$101

$113

$109

$408

Less: disbursements

Purchase of inventory

$49

$59

$52

$33

$193

Selling and administrative expenses

$32

$45

$30

$23

$130

Equipment purchases

$12

$9

$24

$10

$55

Dividends

$2

$2

$2

$2

$8

Total disbursements

$95

$115

$108

$68

$386

Excess (deficiency) of cash available over disbursements

-$1

-$14

$5

$41

$22

Financing:

Borrowings

$4

$17

$0

$0

$21

Repayments (including interest)

$0

$0

-$2

-$20

-$22

Total Financing

$4

$17

-$2

-$20

-$1

Cash balance, ending

$3

$3

$3

$21

$21

*Interest will total $1,000 for the year

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