Beasley Company prepared a cash budget by quarters for the upcoming year. Missin
ID: 2548960 • Letter: B
Question
Beasley Company prepared a cash budget by quarters for the upcoming year. Missing data amounts are indicated with question marks or lower case letters; these lower case letters will be referred to in the questions that follow.
Beasley requires a minimum balance of $10,000 to start a quarter.
All data are in thousands.
Beasley Corporation
Cash Budget
QTR 1
QTR 2
QTR 3
QTR 4
$16
$ e
$13
$10
a
70
67
80
Total cash available
?
?
80
90
31
c
40
35
25
22
?
15
10
14
19
0
0
6
0
5
66
?
f
55
7
17
(2)
35
b
--
12
--
--
d
--
(12)
?
?
12
(12)
$10
$?
$10
$23
====
====
====
====
a. The collections from customers during the first quarter (item a) are: $50, $60, $57, or $73?
b. The borrowing required during the first quarter to meet the minimum cash balance (item b) is: $0, $7, $10, or $3?
c. The cash disbursed for purchases during the second quarter (item c) is: $55, $9, $13, or $21?
d. The repayment (including interest) of financing during the second quarter (item d) is: $4, $0, $17 or $7?
e. The total disbursements during the third quarter (item f) is: $84, $78, $82, or $59?
f. The cash balance at the beginning of the second quarter (item e) is: $10, $14, $0 or $7?
QTR 1
QTR 2
QTR 3
QTR 4
Cash balance, beginning$16
$ e
$13
$10
Add collections from customersa
70
67
80
Total cash available
?
?
80
90
Less disbursements: Purchase of inventory31
c
40
35
Operating expenses25
22
?
15
Equipment purchases10
14
19
0
Dividends0
6
0
5
Total disbursements66
?
f
55
Excess (deficiency) of cash availableover disbursements
7
17
(2)
35
b
--
12
--
Repayments (including interest)--
d
--
(12)
Total financing?
?
12
(12)
Cash balance, ending$10
$?
$10
$23
====
====
====
====
Explanation / Answer
Answer
Working
QTR 1
QTR 2
QTR 3
QTR 4
A
Cash balance, beginning
$ 16.00
$ 10.00
$ 13.00
$ 10.00
B
Add collections from customers
$ 57.00
$ 70.00
$ 67.00
$ 80.00
C=A-B
Total cash available
$ 73.00
$ 80.00
$ 80.00
$ 90.00
Less disbursements:
D
Purchase of inventory
$ 31.00
$ 21.00
$ 40.00
$ 35.00
E
Operating expenses
$ 25.00
$ 22.00
$ 23.00
$ 15.00
F
Equipment purchases
$ 10.00
$ 14.00
$ 19.00
$ -
G
Dividends
$ -
$ 6.00
$ -
$ 5.00
H=D+E+F+G
Total disbursements
$ 66.00
$ 63.00
$ 82.00
$ 55.00
I=C-H
Excess (deficiency) of cash available over disbursements
$ 7.00
$ 17.00
$ (2.00)
$ 35.00
Financing:
J
Borrowings:
$ 3.00
--
$ 12.00
--
K
Repayments (including interest)
--
$ (4.00)
--
$ (12.00)
L=J+K
Total financing
$ 3.00
$ (4.00)
$ 12.00
$ (12.00)
M=I + L
Cash balance, ending
$ 10.00
$ 13.00
$ 10.00
$ 23.00
a. The collections from customers during the first quarter (item a) are: $57
b. The borrowing required during the first quarter to meet the minimum cash balance (item b) is: $3
c. The cash disbursed for purchases during the second quarter (item c) is: $21
d. The repayment (including interest) of financing during the second quarter (item d) is: $4
e. The total disbursements during the third quarter (item f) is: $82
f. The cash balance at the beginning of the second quarter (item e) is: $10
Working
QTR 1
QTR 2
QTR 3
QTR 4
A
Cash balance, beginning
$ 16.00
$ 10.00
$ 13.00
$ 10.00
B
Add collections from customers
$ 57.00
$ 70.00
$ 67.00
$ 80.00
C=A-B
Total cash available
$ 73.00
$ 80.00
$ 80.00
$ 90.00
Less disbursements:
D
Purchase of inventory
$ 31.00
$ 21.00
$ 40.00
$ 35.00
E
Operating expenses
$ 25.00
$ 22.00
$ 23.00
$ 15.00
F
Equipment purchases
$ 10.00
$ 14.00
$ 19.00
$ -
G
Dividends
$ -
$ 6.00
$ -
$ 5.00
H=D+E+F+G
Total disbursements
$ 66.00
$ 63.00
$ 82.00
$ 55.00
I=C-H
Excess (deficiency) of cash available over disbursements
$ 7.00
$ 17.00
$ (2.00)
$ 35.00
Financing:
J
Borrowings:
$ 3.00
--
$ 12.00
--
K
Repayments (including interest)
--
$ (4.00)
--
$ (12.00)
L=J+K
Total financing
$ 3.00
$ (4.00)
$ 12.00
$ (12.00)
M=I + L
Cash balance, ending
$ 10.00
$ 13.00
$ 10.00
$ 23.00
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