Question

Exercise 8-7 Cash Budget [LO8-8] 5 Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter S 280,000 S 330,000 10 $ 310,000 $ 290,000 $ 330,000 310,000 $ 430,000 $ 300,000 points Total cash receipts Total cash disbursements Skipped The company's beginning cash balance for the upcoming fiscal year will be $40,000 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 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 For simplicity, assume that interest is not compounded eBock Required: Print Prepare the company's cash budget for the upcoming fiscal year (Repeyments, and interest, should be indicated by a minus sign.) Garden Depot Cash Budget eferences 1st Quarter 2nd Quarter 3ed Quarter 4th Quarter Year Beginning cash balance Total cash receipts Total cash available Tetal cash disbursements Excess of cash available oer bursemets Finandng Bogs Repayments 0 0 0 0 0 0 0 0 0 nterest Tal eancing Endeg cash balance 0 LO

Answer 1

				1st qtr	2nd qtr	3rd quarter	4 th qtr	year
Beginning cash balance				40,000	10,000	118,800	138,800	40,000
total cash receipts				280,000	430,000	310,000	330,000	1,350,000
total cash available				320,000	440000	428800	468800	1,390,000
total cash disbursements				330,000	300,000	290,000	310,000	1,230,000
Excess of cash available over disbursement				-10,000	140,000	138,800	158,800	160,000
Financing:
Borrowings				20,000	0	0	0	20,000
Repayments				0	-20,000	0	0	-20,000
Interest				0	-1,200	0	0	-1,200
total financing				20,000	-21,200	0	0	-1,200
Ending cash balance				10,000	118,800	138,800	158,800	158,800
			interest = 20000*3%*2 qtrs
				1200