Forest Outfitters is a retailer that is preparing its budget for the upcoming fi

Question

Forest Outfitters 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 $61,600. The company requires a minimum cash balance of $31,600 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.1%. 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. Complete the company's cash budget for the upcoming fiscal year. (Input all amounts as positive values except cash deficiency, repayments, and interest, which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to the nearest dollar amount. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed.)

Explanation / Answer

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year A Cash Balance Beginning 61,600 31,600 79,106 31,600 203,906 B Total Cash Receipts 384,000 680,000 419,000 454,000 1,937,000 C Total Cash available 445,600 711,600 498,106 485,600 2,140,906 D Less Total cash disbursements 521,000 521,000 521,000 521,000 521,000 E Excess/(Deficiency) of cash available over disbursement (75,400) 190,600 (22,894) (35,400) 1,619,906 F Cash Balancing required at the end of quarter 31,600 31,600 31,600 31,600 0 Q Amount to be borrowed to meet closing requirement 107,000 0 54,494 67,000 -1,619,906 R Financing S Borrowings ( at beginning) 107,000 0 54,494 67,000 T Repayments (at ending) 0 111,494 0 0 U Interest @2.1% per quarter 2,247 0 1,144 1,407 Interest @2.1% per quarter for previous quarter 1,144 V Total Financing 109,247 0 55,638 69,551 W Cash Balance , ending 31,600 79,106 31,600 31,600 (A+B-D+Q-T) $                                                                                       111,494.00 Principal 107,000 Interest for 1st quarter 2,247 Interest for 2nd quarter 2,247 Amount borrowed in begging of Quarter Q3 not paid in current year and so considered interest for next quarter also- $1,444 Column "V", reprents amount outstanding at the end of each quarter - including interest Column "W" reprensts cash balance at the end of each quarter

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