Question

oardео рероисша море море hay prepued the following summary of its budgeted cash flows Total cash receipts Total cash disbursements 1st Ouarter 2nd Quarter $180,000 $330,000 $260,000 $230,000 3rd Quarter 4th Ouarter $210,000 $230,000 $220,000 $240,000 The company's beginning cash balance for the upcoming fiscal year will be $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 interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its louns, or any part of its Joans, at the end of any quarter. Interest pay ments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded. Requlred: Prepare the company's cash budget for the upcoming fiscal year

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Answer 1

Particulars	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
Opening balance	20,000	10,000	35,800	25,800	20,000
Receipts	180,000	330,000	210,000	230,000	950,000
Disbursements	-      260,000	-      230,000	-      220,000	-      240,000	- 950,000
Borrowings	70,000	-         70,000	-		-
Interest payment @ 3%		-           4,200			-     4,200
	10,000	35,800	25,800	15,800	15,800

The Borrowings are done at the beginning of Quarter 1 and repaid at the end of Quarter 2, interest paid on repayment during the 2nd quarter is 6%.