ezto.mheducation.com Garden Depot is a retailer that is preparing its budget for

Question

ezto.mheducation.com 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 fows: Ist Quarter 2nd Quarter 3rd Quarter ?Quarter Total cash receipts Total cash disbursements 358,000 $328,000 $318,000 $338,000 requires The company's beginning cash balance for the upcoming fiscal year will be $35,000. The 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 Complete the company's cash budget for the upcoming fiscal year. (Cash deficiencies, disbursements, repayments, and interest should be indicated by a minus sign.) Garden Depot Cash Budget 1st Quarter 2nd 3rd Quarter 4t Beginning cash balance Total cash receipts Total cash available Less total cash disbursements Excess of cash available over disbursements Financing Total financing Ending cash balance 2 3 4

Explanation / Answer

Garden Depot Cash budget Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Opening cash Balance          35,000.00          35,000.00          65,520.00        97,520.00          35,000.00 Total Cash Receipts        300,000.00        420,000.00        350,000.00      370,000.00    1,440,000.00 Total Cash available        335,000.00        455,000.00        415,520.00      467,520.00    1,475,000.00 Less: Total cash Disbursements        358,000.00        328,000.00        318,000.00      338,000.00    1,342,000.00 Excess of Cash Available over disbursements        (23,000.00)        127,000.00          97,520.00      129,520.00        133,000.00 Financing: Borrowings          58,000.00                         -            58,000.00 Repayments                         -          (58,000.00)                         -                          -          (58,000.00) Interest                         -            (3,480.00)                         -                          -            (3,480.00) Total Financing          58,000.00        (61,480.00)                         -                          -            (3,480.00) Ending Cash Balance          35,000.00          65,520.00          97,520.00      129,520.00        129,520.00

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