A cash budget, by quarters, is given below for a retail company (000 omitted). T
ID: 2548506 • Letter: A
Question
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $7,000 to start each quarter. Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.)
Quarter (000 omitted) 1 2 3 4 Year Cash balance, beginning $7 Add collections from customers 105 378 Total cash available 91 Less disbursements: Purchase of inventory 44 54 28 Selling and administrative expenses 32 30 124 Equipment purchases 8 8 19 45 Dividends 2 2 2 2 Total disbursements 96 Excess (deficiency) of cash available over disbursements (2) 12 Financing: Borrowings 8 Repayments (including interest) * (13) Total financing Cash balance, ending *Interest will total $1,000 for the year.Explanation / Answer
Quarter (000 omitted)
1
2
3
4
Year
Cash balance, beginning
$7
7
7
7
7
Add collections from customers
84
88
105
101
378
Total cash available
91
95
112
108
385
Less disbursements:
Purchase of inventory
44
54
49
28
175
Selling and administrative expenses
39
32
30
23
124
Equipment purchases
8
8
19
10
45
Dividends
2
2
2
2
8
Total disbursements
93
96
100
63
352
Excess (deficiency) of cash available over disbursements
(2)
(1)
12
45
33
Financing:
Borrowings
9
8
-
-
17
Repayments (including interest) *
-
-
(5)
(13)
(18)
Total financing
9
8
(5)
(13)
(1)
Cash balance, ending
7
7
7
32
32
***Interest will total $1,000 for the year.
Quarter (000 omitted)
1
2
3
4
Year
Cash balance, beginning
$7
7
7
7
7
Add collections from customers
84
88
105
101
378
Total cash available
91
95
112
108
385
Less disbursements:
Purchase of inventory
44
54
49
28
175
Selling and administrative expenses
39
32
30
23
124
Equipment purchases
8
8
19
10
45
Dividends
2
2
2
2
8
Total disbursements
93
96
100
63
352
Excess (deficiency) of cash available over disbursements
(2)
(1)
12
45
33
Financing:
Borrowings
9
8
-
-
17
Repayments (including interest) *
-
-
(5)
(13)
(18)
Total financing
9
8
(5)
(13)
(1)
Cash balance, ending
7
7
7
32
32
***Interest will total $1,000 for the year.
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