4 Forest Outfitters is a retailer that is preparing its budget for the upcoming
ID: 2454945 • Letter: 4
Question
4
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:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total cash receipts
$ 447,000
$ 686,000
$ 426,000
$ 518,000
Total cash disbursements
$ 524,000
$ 405,000
$ 437,000
$ 474,000
The company's beginning cash balance for the upcoming fiscal year will be $52,600. The company requires a minimum cash balance of $30,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.7%. 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.
Required:
Complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)
Forest Outfitters
Cash Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Cash balance, beginning
Total cash receipts
Total cash available
Less total cash disbursements
Excess of cash available over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending
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:
Explanation / Answer
Forest Outfitters
Cash Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Cash balance, beginning (A)
$ 52,600.00
$ 30,000.00
$ 255,131.20
$ 244,131.20
$ 52,600.00
Add: Total cash receipts (B)
$ 447,000.00
$ 686,000.00
$ 426,000.00
$ 518,000.00
$ 2,077,000.00
Total cash available (C) = A+B
$ 499,600.00
$ 716,000.00
$ 681,131.20
$ 762,131.20
$ 2,129,600.00
Less: total cash disbursements (D)
$ (524,000.00)
$ (405,000.00)
$ (437,000.00)
$ (474,000.00)
$ (1,840,000.00)
Excess of cash available over disbursements (E) = C-D
$ (24,400.00)
$ 311,000.00
$ 244,131.20
$ 288,131.20
$ 289,600.00
Financing:
Borrowings
$ 54,400.00
$ -
$ -
$ -
$ 54,400.00
(24400+30000)
Less: Repayments
$ -
$ (54,400.00)
$ -
$ -
$ (54,400.00)
Less: Interest
$ -
$ (1,468.80)
$ -
$ -
$ (1,468.80)
(54400*2.7%)
Total financing (F)
$ 54,400.00
$ (55,868.80)
$ -
$ -
$ (1,468.80)
Cash balance, ending (E+F)
$ 30,000.00
$ 255,131.20
$ 244,131.20
$ 288,131.20
$ 288,131.20
Forest Outfitters
Cash Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Cash balance, beginning (A)
$ 52,600.00
$ 30,000.00
$ 255,131.20
$ 244,131.20
$ 52,600.00
Add: Total cash receipts (B)
$ 447,000.00
$ 686,000.00
$ 426,000.00
$ 518,000.00
$ 2,077,000.00
Total cash available (C) = A+B
$ 499,600.00
$ 716,000.00
$ 681,131.20
$ 762,131.20
$ 2,129,600.00
Less: total cash disbursements (D)
$ (524,000.00)
$ (405,000.00)
$ (437,000.00)
$ (474,000.00)
$ (1,840,000.00)
Excess of cash available over disbursements (E) = C-D
$ (24,400.00)
$ 311,000.00
$ 244,131.20
$ 288,131.20
$ 289,600.00
Financing:
Borrowings
$ 54,400.00
$ -
$ -
$ -
$ 54,400.00
(24400+30000)
Less: Repayments
$ -
$ (54,400.00)
$ -
$ -
$ (54,400.00)
Less: Interest
$ -
$ (1,468.80)
$ -
$ -
$ (1,468.80)
(54400*2.7%)
Total financing (F)
$ 54,400.00
$ (55,868.80)
$ -
$ -
$ (1,468.80)
Cash balance, ending (E+F)
$ 30,000.00
$ 255,131.20
$ 244,131.20
$ 288,131.20
$ 288,131.20
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.