7. 100 points Garden Depot is a retailer that is preparing its budget for the up
ID: 2515267 • Letter: 7
Question
7. 100 points 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: 360 000 365,000335,000 $325,000 $345.000 The company's beginning cash balance for the upcoming fiscal year will be $25,000. 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: Complete the company's cash budget for the upcoming fiscal year. Cash deficiency, repayments, and interest, should be indicated by a minus sign.) Cesh Budget Total cash receipts Total financing Ending cash balance Hints References eBook& ResourcesExplanation / Answer
Cash Budget
Quarter
Year
1
2
3
4
Beginning Cash Balance
$25,000
$10,000
$62,600
$97,600
$25,000
Total Cash receipts
$310,000
$430,000
$360,000
$380,000
$1,480,000
Total cash available
$335,000
$440,000
$422,600
$477,600
$1,505,000
Less: Total Cash Disbursements
$365,000
$335,000
$325,000
$345,000
$1,370,000
Excess (Deficiency) of available cash over cash disbursements
-$30,000
$105,000
$97,600
$132,600
$135,000
Financing:
Borrowings
$40,000
$0
$0
$0
$40,000
Repayment
$0
-$40,000
$0
$0
-$40,000
Interest
$0
-$2,400
(40,000*3%*2 quarter)
$0
$0
-$2,400
Total Financing
$40,000
-$42,400
$0
$0
-$2,400
Ending Cash Balance
$10,000
$62,600
$97,600
$132,600
$132,600
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Cash Budget
Quarter
Year
1
2
3
4
Beginning Cash Balance
$25,000
$10,000
$62,600
$97,600
$25,000
Total Cash receipts
$310,000
$430,000
$360,000
$380,000
$1,480,000
Total cash available
$335,000
$440,000
$422,600
$477,600
$1,505,000
Less: Total Cash Disbursements
$365,000
$335,000
$325,000
$345,000
$1,370,000
Excess (Deficiency) of available cash over cash disbursements
-$30,000
$105,000
$97,600
$132,600
$135,000
Financing:
Borrowings
$40,000
$0
$0
$0
$40,000
Repayment
$0
-$40,000
$0
$0
-$40,000
Interest
$0
-$2,400
(40,000*3%*2 quarter)
$0
$0
-$2,400
Total Financing
$40,000
-$42,400
$0
$0
-$2,400
Ending Cash Balance
$10,000
$62,600
$97,600
$132,600
$132,600
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