### Educational Resource: Understanding Cash Budgeting#### Introduction to Cash BudgetingA cash budget is an estimate of cash inflows and outflows for a business over a specific period. It helps businesses ensure they have enough cash to cover their operations and identify any potential shortfalls. Below is a detailed cash budget for a retail company, broken down by quarters, with certain values that need to be filled. Understanding each component is crucial to grasp how a cash budget helps in financial planning.#### Cash Budget BreakdownThe company's cash budget for the year is divided into four quarters. The amounts are presented in thousands of dollars, and the company requires maintaining a minimum cash balance of $8,000 at the start of each quarter.#### Cash Budget Table| **Description** | **Quarter 1** | **Quarter 2** | **Quarter 3** | **Quarter 4** | **Year** ||-----------------------------------------------------------|---------------|---------------|---------------|---------------|-----------|| **Cash balance, beginning** | $6 | $ 8 | $8 | $8 | $30 || **Add collections from customers** | 73 | 110 | 120 | 112 | 415 || **Total cash available** | 79 | 118 | 128 | 120 | 445 || **Less disbursements:** | | | | | || - Purchase of inventory | 55 | 65 | 55 | 31 | 206 || - Selling and administrative expenses | 20 | 45 | 30 | 24 | 119 || - Equipment purchases | 2 | 10 | 1 | 12 | 25 || - Dividends | 0 | 0 | 21 | 0 | 21 || **Total disbursements** | 77 | 120 | 107 | 67 | 371 || **Excess (deficiency) of cash available over disbursements** | 2 | (3) | 21 | 53 | 50 || **Financing:** | | | | | |

Cash Budget:- A Cash budget is a detailed estimate of the cash receipt from all sources and cash…

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $8,000 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.) Answer is complete but not entirely correct. Quarter 2 Quarter 1 (000 omitted) Quarter 3 (000 Quarter 4 (000 (000 Year (000 omitted) omitted) omitted) omitted) Cash balance, beginning S $ Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 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. S 6 73 79 55 20->> 13 2 90- (11) 19 S 00 8 $ 19 8 110 118 65 45 9 2 121 (3) ✔ 11 110 S 8 S 8 120 128✔ 55 30 30 2 117 11 00 (3) S 8 S 8 112 120 → 31 240 100 2 67- 53✔ 00 (28)✔ 25 $ 30 X 415 445 206 119 62 80 395 50 X 30→ (31) ✔ (1) ► 40 x

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $8,000 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.) Answer is complete but not entirely correct. Quarter 2 Quarter 1 (000 omitted) Quarter 3 (000 Quarter 4 (000 (000 Year (000 omitted) omitted) omitted) omitted) Cash balance, beginning S $ Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 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. S 6 73 79 55 20->> 13 2 90- (11) 19 S 00 8 $ 19 8 110 118 65 45 9 2 121 (3) ✔ 11 110 S 8 S 8 120 128✔ 55 30 30 2 117 11 00 (3) S 8 S 8 112 120 → 31 240 100 2 67- 53✔ 00 (28)✔ 25 $ 30 X 415 445 206 119 62 80 395 50 X 30→ (31) ✔ (1) ► 40 x

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $3,000 to start each quarter. Required: Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.) Cash balance, beginning Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 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. Quarter 1 (000 omitted) $ 9 97 54 7 2 (5) Quarter 2 (000 omitted) 64 45 9 2 120 12 Quarter 3 (000 omitted) 124 30 29 2 12 Quarter 4 (000 omitted) 30 2 (12) Year (000 omitted) 431 137 55
am. 116.
A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $4,000 to start each quarter. Required: Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.) Cash balance, beginning Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 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. $ 1 6 69 47 10 2 (5) Quarter (000 omitted) 2 3 57 32 9 2 100 6 108 30 22 2 7 4 31 2 (13) (000 omitted) Year 369 98 51
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! Required information [The following information applies to the questions displayed below.] Built-Tight is preparing its master budget. Budgeted sales and cash payments follow: July $ 56,000 August $ 72,000 September $ 56,000 Budgeted sales Budgeted cash payments for Direct materials 15,560 3,440 19,600 12,840 2,760 16,200 13,160 2,840 16,600 Direct labor Overhead Sales to customers are 20% cash and 80% on credit. Sales in June were $53,500. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of $47,000 in cash and $4,400 in loans payable. A minimum cash balance of $47,000 is required. Loans are obtained at the end of any month when the preliminary cash balance is below $47,000. Interest is 1% per month based on the beginning-of-the-month loan balance and is paid at each month-end. Any preliminary cash balance above $47,000 is used to repay loans at month-end. Expenses are paid in the month incurred and consist of sales…
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A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $8,000 to start each quarter. Required: Fill in the missing amounts. Note: Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign. Cash balance, beginning Add collections from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 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. $ 1 S 70 42 14 2 (8) Quarter (000 omitted) 2 3 52 32 8 2 94 10 103 30 17 2 14 4 34 2 (21) (000 omitted) Year 347 103 49