Garden Depot is a retailer that is preparing its budget for the upcoming fiscal

Question

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 flows Total cash receipts Total cash disbursements $180,000 $330,000 $260,000$230,000$220,000$240,000 $210,000 $230,000 The company's beginning cash balance for the upcoming fiscal year willbe $20,000 The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly int erest 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 Required 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 Quarter 3rd Quarter 4th Quarter Year Beginning cash balance Total cash receipts Total cash available Less total cash disbursements Excess of cash available over disbursements Financing S 20000 0,000 330,000 340,000 230,000 110.000 180,000 200,000 260,000 (60.000) 510,000 0510,000 490,000 20.000 70.000 (70,000 Repayments (70,000) Interest Total financing Ending cash balance 70.000 10,000 S 40 000 S (70.000) O S 20,000 ENG 7 SONY

Explanation / Answer

Prepare cash budget :

1st quarter 2nd quarter 3rd quarter 4th quarter year Beginning cash balance 20000 10000 37900 27900 20000 Total cash receipts 180000 330000 210000 230000 950000 Total cash available 200000 340000 247900 257900 970000 Less : total cash disbursements (260000) (230000) (220000) (240000) (950000) Excess of cash available over disbursement (60000) 110000 27900 17900 20000 Financing : Borrowing 70000 70000 Repayments (70000) (70000) Interest (2100) (2100) Total financing 70000 (72100) (2100) Ending cash balance 10000 37900 27900 17900 17900

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