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: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $ 230,000 380,000 260,000 280,000 Total cash receipts Total cash disbursements295,000 265,000 255,000 275,000 The company's beginning cash balance for the upcoming fiscal year will be $30,000. 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.) Garden Depot 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 inancing $30,000 10,000 230,000 260,0003 295,000 35,000) 380,000 260,000800 1,150,000 390,000 260,000 280,000 1,150,000 265000255000 275,000 1090000 60,000 )125,000 5,000 5,000 Borrowings Repayments Interest Total financing Ending cash balance $ 35,000) 125,000$ 5,000$ 5,000 60,000

Explanation / Answer

Cash Budget :-

Particulars Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 Year Beginning Cash Balance 30000 10000 77300 82300 30000 Total Cash Receipts 230000 380000 260000 280000 1150000 Total Cash available 260000 390000 337300 362300 1180000 Total Cash Disbursements (295000) (265000) (255000) (275000) (1090000) Excess of cash available over disbursements (1) (35000) 125000 82300 87300 90000 Financing :- Borrowings 45000 - - - 45000 Repayments - (45000) - - (45000) Interest ($45000 * 3% * 2) - (2700) - - (2700) Total Financing (2) 45000 47700 - - (2700) Ending cash Balance ((1) - (2)) 10000 77300 82300 87300 87300

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.