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 Quarter (000 omitted) Year Cash balance, beginning Add collections from customers Total cash available Less disbursements: 108 369 69 47 57 31 Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 32 30 98 10 51 100 Total disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings (14) Repayments (including interest) Total financing Cash balance, ending Interest will total $1,000 for the year

Explanation / Answer

Cash Budget Quarter (000 omitted) 1 2 3 4 Year Cash balance, beginning 6 5 5 5 6 Add collection from customers 63 94 108 104 369 (69-6) (99-5) (369-63-94-108) Total cash available 69 99 113 109 375 (100-1) (108+5) (104+5) Less Disbursements: Purchase of inventory 47 57 51 31 186 (105-30-22-2) Selling and administrative expense 15 32 30 21 98 (74-47-10-2) (98-15-32-30) Equipment purchase 10 9 22 10 51 (51-10-9-22) Dividends 2 2 2 2 8 Total disbursements 74 100 105 64 343 (69+5) (113-8) (31+21+10+2) Excess (deficiency) of cash available over disbursements -5 -1 8 45 32 (5-6) (109-64) Financing: Borrowings 10 6 0 0 16 (5+5) Repayments (including interest) 0 0 -3 -14 -17 Total financing 10 6 -3 -14 -1 Cash balance. Ending 5 5 5 31 31 (45-14)

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