A cash budget, by quarters, is given below for a retail company (000 omitted). T

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 $5,000 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.) Cash Budget er (000 omitted) ear ash balance, beginning dd collections from customers 106 67 Total cash available ess disbursements Purchase of inventory Selling and administrative expenses Equipment purchases Dividends otal disbursements xcess (deficiency) of cash available over 32 30 2) disbursements nancing Borrowings Repayments (including interest) * otal financing ash balance, ending Interest will total S1,000 for the year.

Explanation / Answer

Answer: Cash Budget Quarter (000 omitted)                    1                    2                   3                      4 Year Cash balance, beginning $                 8 $                 5 $               5 $                  5 $         8 Add collections from customers $               69 ($77-8) $               90 (95-5) $            106 $               102 (367-69-90-106) $     367 Total cash available $               77 $               95 (97-2) $            111 $               107 $     375 Less disbursements    Purchase of inventory $               45 $               55 $              50 (102-30-20-2) $                 29 $     179    Selling and administrative expense $               25 (79-45-7-2) $               32 $              30 $                 24 (111-25-32-30) $     111    Equipment purchases $                 7 $                 8 $              20 $                 10 (45-7-8-20) $       45    Dividends paid $                 2 $                 2 $               2 $                  2 $         8 Total disbursements $               79 (77-(2)) $               97 $            102 (111-9) $                 65 $     343 Excess (deficiency) of receipts    over disbursements $                (2) $                (2) (7-5) $               9 $                 42 $       32 Financing:    Borrowings $                 7 (5-(-2)) $                 7 $              -   $                 -   $       14    Repayments including interest $              (4) $                (11) $      (15) Total financing $                 7 $                 7 $              (4) $                (11) $        (1) Cash balance, ending $                 5 $                 5 $               5 $                 31 $       31

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