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 $5,000 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.)
1 - $ Cash balance, beginning Add collections from customers Total cash available Less disbursements: Quarter (000 omitted) (000 omitted) 2 3 4 Year 61 $ 5 $ 51 $ 5 $ 65 78 9684 323 711 831 101 891 344 Purchase of inventory L 35 45 163 28 113 Selling and administrative expenses Equipment purchases 8 2 73 (2)| 48 30 10 2 90 1 11 8 2 85 10 Dividends 35 25 10 2 72 1 71 320 6 3 21 150 of 36 Total disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments (including interest)* Total financing Cash balance, ending *Interest will total $1,000 for the year. 0 2211 201 $

Answer 1

Cash Budget- Missing Amount
	1	2	3	4	Year
Cash Balance, beginning	6	5	5	5	6
Add collections from customers	65	70	96	92	323
Total cash available	71	75	101	97	329
Less disbursements
Purchase of Inventory	35	45	48	35	163
Selling and Admin Expenses	28	30	30	25	113
Equipment purchases	8	8	10	10	36
Dividends	2	2	2	2	8
Total disbursements	73	85	90	72	320
Excess(deficiency)	-2	-10	11	25	9
Financing
Borrowings	7	15	0	0	22
Repayments (including interest)	0	0	-6	-17	-23
Total financing	7	15	-6	-17	-1
Cash Balance, ending	5	5	5	8	8

Borrowing = Shortage in case + Minimum desired balance

i.e. 2 + 5 = 7 in Quarter 1