Question

Chapter 8 Exercises Saved Help Save & Exit Submit Check my work 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: points Total cash receipts Total cash disbursements 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $ 340,000 $ 460,000 $390,000 $ 410,000 $ 386,000 $ 356,000 $346,000 $ 366,000 eBook The company's beginning cash balance for the upcoming fiscal year will be $24,000. 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. Hint Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.) Ask Garden Depot Cash Budget Print 1st Quarter and Quarter Quarter Quarter References Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance

Answer 1

GARDEN Depot Cash Budget 1 Quarter 2 Quarter 3 Quarter 4 Quarter Beginning cash balance 24000 10000 80080 124080 Total Cash receipts 340000 460000 390000 410000 Total cash available 364000 470000 470080 534080 Less: Total cash disbursements 386000 356000 346000 366000 Excess of cash available over disbursements -22000 114000 124080 168080 Financing: Borrowing 32000 Repayment -32000 Interest - 1920 Total financing 32000 -33920 Ending cash balance 10000 80080 124080 168080 Year! 24000 1600000 1624000 1454000 170000 32000 -32000 -1920 -1920 168080| Interest = 32000 * 3% * 2 = 1920