Question

Garden Depot is a retaller that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter $ 300,000 $ 358,000 2nd Quarter $.420,000 $328,000 3rd Quarter 4th Quarter $ 350,000 $370,000 $318,000 $338,000 The company's beginning cash balance for the upcoming fiscal year will be $35,000. 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 repald. For simplicity, assume that interest is not compounded. Required: Prepare the company's cash budget for the upcoming fiscal year (Cash deficiency, repayments and Interest should be indicated by a minus slgn.) Year Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments interest Total financing Ending cash balance

Answer 1

Garden Depot
Cash Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning Cash Balance	35,000	10,000	67,020	99,020	35,000
Total Cash Receipts	300,000	420,000	350,000	370,000	1,440,000
Total cash available	335,000	430,000	417,020	469,020	1,475,000
Total cash disbursements	358,000	328,000	318,000	338,000	1,342,000
Excess (deficiency) of cash available over disbursements	(23,000)	102,000	99,020	131,020	133,000
Financing :
Borrowings	33,000	-	-	-	33,000
Repayments	-	(33,000)	-	-	(33,000)
Interest	-	(1,980)	-	-	(1,980)
Total financing	33,000	(34,980)	-	-	(1,980)
Ending cash balance	10,000	67,020	99,020	131,020	131,020
Borrowing in Q1                          =	Deficiency of cash availabe over disbursements + Minimum requirement of cash balance
=	23,000 + 10,000
=	33,000
Interest in Q2                              =	Borrowing in Q1 * 3% * 2 Quarters
=	33,000 * 3% * 2
=	1,980

Hruska Corporation
Total Direct Labour Cost
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produces	10,900	9,900	11,900	12,900	45,600
Direct labour Hours	2,725	2,475	2,975	3,225	11,400
(units to be produced * 0.25)
Total Direct Labour Cost	32,700	29,700	35,700	38,700	136,800
(Direct labour hours * $ 12)
Total manufacturing Overhead and cash disbursements for manufacturing overhead
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produces	10,900	9,900	11,900	12,900	45,600
Direct labour Hours	2,725	2,475	2,975	3,225	11,400
(units to be produced * 0.25)
Total variable manufacturing OH	5,450	4,950	5,950	6,450	22,800
(Direct labour hours * $ 2)
Total fixed manufacturing OH	89,000	89,000	89,000	89,000	356,000
Total manufacturing Overhead	94,450	93,950	94,950	95,450	378,800
Non cash element - depreciation	29,000	29,000	29,000	29,000	116,000
Cash disbursements for OH	65,450	64,950	65,950	66,450	262,800