Question

Tri-County Social Service Agency is a not-for-profit organization in the Midwest. Use the following information to complete the cash budget for the year ending December 31. • The Board of Trustees requires that Tri-County maintain a minimum cash balance of $7,000. • If cash is short, the agency may borrow from an endowment fund the amount required to maintain the $7,000 minimum. • It is anticipated that the year will begin with an $10,000 cash balance. • Contract revenue is received evenly during the year. • Mental health income is expected to grow by $4,000 in the second and third quarters; no change is expected in the fourth quarter. Required: 2. Complete the cash budget for each quarter and the year as a whole. 3. Determine the amount that the agency will owe the endowment fund at year-end.

Answer 1

Answer 2 Completed Cash budget

Cash Budget for Tri-County Social Service Agency
(in thousands)
Quarters
	I	II	III	IV	Year
Cash balance, beginning	$           10	$             7	$              7	$              7	$              10
Receipts
Grants	$           85	$        100	$            46	$            46	$           277
Contracts	$           30	$           30	$            30	$            30	$           120
Mental health income	$           50	$           54	$            58	$            58	$           220
Charitable donations	$        450	$        322	$         210	$         430	$        1,412
Total Cash available	$        625	$        513	$         351	$         571	$        2,039
Less: Disbursements
Salaries and benefits	$        568	$        372	$         386	$         368	$        1,694
Office expenses	$        100	$           78	$            73	$            56	$           307
Equipment purchases & maintenance	$             5	$           13	$              5	$              3	$              26
Specific assistance	$           18	$           19	$            22	$            19	$              78
Total disbursements	$        691	$        482	$         486	$         446	$        2,105
Excess (deficiency) of cash available over disbursements	$        (66)	$           31	$       (135)	$         125	$           (66)
Financing
Borrowings from endowment fund	$           73	$            -	$         142		$           215
Repayments	$            -	$        (24)	$             -	$       (118)	$         (142)
Total financing effects	$           73	$        (24)	$         142	$       (118)	$              73
Cash balance, ending	$             7	$             7	$              7	$              7	$                7

Answer 3

Amount owed to endowment fund

$           73

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