Forest Outfitters is a retailer that is preparing its budget for the upcoming fi

Question

Forest Outfitters is a retailer that is preparing its budget for the upcoming fiscal year.Management has prepared the following summary of its budgeted cash flows: The company's beginning cash balance for the upcoming fiscal year will be $65,200. The company requires a minimum cash balance of $31,200 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.4%. 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. Required: Complete the company's cash budget for the upcoming fiscal year.

Explanation / Answer

Forest Outfitters All Amounts in $ Cash Budget for the Upcoming Fiscal Year, Quarterwise Quarter Quarter Quarter Quarter Total 1 2 3 4 Cash Balance, Beginning 65200 31200 148330 129330 65200 Total Cash Receipts 350000 667000 423000 508000 1948000 Total Cash Available 415200 698200 571330 637330 2013200 Less Total Cash Disbursements 529000 404000 442000 460000 1835000 Excess of Cash Available over Disbursements -113800 294200 129330 177330 178200 Financing Borrowings 145000 Repayments 145000 Interest 870 Total Financing 145000 145870 0 0 0 Cash Balance, Ending 31200 148330 129330 177330 178200

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