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: Total cash receipts Total cash disbursements 1st Quarter $ 240,000 $ 302,000 2nd Quarter 3rd Quarter $ 390,000 $ 272,000 $ 270,000 $ 262,000 4th Quarter $ 290,000 $ 282,000 The company's beginning cash balance for the upcoming fiscal year will be $32,000. 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 borow 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. Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments and interest should be indicated by a minus sign.)
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: Total cash receipts Total cash disbursements 1st Quarter $ 240,000 $ 302,000 2nd Quarter 3rd Quarter $ 390,000 $ 272,000 $ 270,000 $ 262,000 4th Quarter $ 290,000 $ 282,000 The company's beginning cash balance for the upcoming fiscal year will be $32,000. 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 borow 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. Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments and interest should be indicated by a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
$ 240,000
$ 302,000
2nd Quarter
$ 390,000
$ 272,000
3rd Quarter
$ 270,000
$ 262,000
4th Quarter
$ 290,000
$ 282,000
Total cash receipts
Total cash disbursements
The company's beginning cash balance for the upcoming fiscal year will be $32,000. 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.
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Repayments and interest should be indicated by a minus sign.)
Garden Depot
Cash Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
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
$
$
%24
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