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 $6,000 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.) Quarter (000 omitted) 2 4 Year Cash balance, beginning Add collections from customers Total cash available Less disbursements 98 325 67 47 30 10 37 29 Purchase of inventory Slling and administrative expenses Equipment purchases Dividends 30 103 12 41 89 Total disbursements Excess (deficiency) of cash available over disbursements Financing. 14 Borrowings Repayments (including interest) 15 (17) Total financing Cash balance, ending nterest will total $1,000 for the year

Explanation / Answer

Cash Budget Particular Q1 Q2 Q3 Q4 Year Cash Balance opening 8 6 6 6 8 Add: Collection from customer 59 73 98 95 325 Total cash available 67 79 104 101 333 Less : Disburesment Purchase of inventory 37 47 46 29 159 Selling and distribution 22 30 30 21 103 Equiment purchase 9 10 12 10 41 Dividend 2 2 2 2 8 Total disbursement 70 89 90 62 311 Excess/(deficit) -3 -10 14 39 22 Financing : Borrowning 10 15 0 0 25 Repayment including interest 1 1 -8 -17 -25 Total financing 11 16 -8 -17 0 Cash balance ending 6 6 6 22 22

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