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 $ 290,000 $ 351,000 Beginning cash balance. Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest The company's beginning cash balance for the upcoming fiscal year will be $47,000. 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. Total financing Ending cash balance 2nd Quarter $ 410,000 $ 321,000 Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated by a minus sign.) $ Garden Depot Cash Budget 1st Quarter $ 3rd Quarter 4th Quarter $ 340,000 $ 311,000 47,000 $ 290,000 337,000 351,000 (14,000) 24,000 2nd Quarter 24,000 10,000 $ $360,000 $ 331,000 10,000 $ 410,000 420,000 321,000 99,000 (24,000) (1,440) (25,440) 3rd Quarter 4th Quarter 73,560 $ 340,000 413,560 311,000 102,560 73,560 $ 0 102,560 $ 102,560 $ 360,000 462,560 331,000 131,560 0 131,560 $ Year 47,000 1,400,000 1,447,000 1,314,000 133,000 24,000 (24,000) (1,440) (1,440) 131,560
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 $ 290,000 $ 351,000 Beginning cash balance. Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest The company's beginning cash balance for the upcoming fiscal year will be $47,000. 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. Total financing Ending cash balance 2nd Quarter $ 410,000 $ 321,000 Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated by a minus sign.) $ Garden Depot Cash Budget 1st Quarter $ 3rd Quarter 4th Quarter $ 340,000 $ 311,000 47,000 $ 290,000 337,000 351,000 (14,000) 24,000 2nd Quarter 24,000 10,000 $ $360,000 $ 331,000 10,000 $ 410,000 420,000 321,000 99,000 (24,000) (1,440) (25,440) 3rd Quarter 4th Quarter 73,560 $ 340,000 413,560 311,000 102,560 73,560 $ 0 102,560 $ 102,560 $ 360,000 462,560 331,000 131,560 0 131,560 $ Year 47,000 1,400,000 1,447,000 1,314,000 133,000 24,000 (24,000) (1,440) (1,440) 131,560
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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![Exercise 8-7 (Algo) Cash Budget [LO8-8]
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
Beginning cash balance
Total cash receipts
Total cash available
Total cash disbursements
1st Quarter
$ 290,000
$ 351,000
The company's beginning cash balance for the upcoming fiscal year will be $47,000. 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, interest, and cash deficiencies should be indicated
by a minus sign.)
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Ending cash balance
2nd Quarter 3rd Quarter
$ 410,000
$ 340,000
$ 321,000
$ 311,000
$
Garden Depot
Cash Budget
1st Quarter
2nd Quarter
47,000 $
290,000
337,000
351,000
(14,000)
24,000
24,000
10,000 $
4th Quarter
$ 360,000
$ 331,000
3rd Quarter
10,000 $
410,000
420.000
321,000
99,000
(24,000)
(1,440)
(25,440)
73,560
$
4th Quarter
73,560 $
340,000
413.560
311,000
102,560
0
102,560
$
102,560
360,000
462,560
331,000
131,560
0
131,560 $
Year
47,000
1,400,000
1,447,000
1,314,000
133,000
24,000
(24,000)
(1,440)
(1,440)
131,560](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e71364f-14c3-431e-8c64-bd94e5d7d807%2Fc71710f8-fe5e-4291-97e5-b1a64ec5af24%2Fixr5esq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 8-7 (Algo) Cash Budget [LO8-8]
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
Beginning cash balance
Total cash receipts
Total cash available
Total cash disbursements
1st Quarter
$ 290,000
$ 351,000
The company's beginning cash balance for the upcoming fiscal year will be $47,000. 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, interest, and cash deficiencies should be indicated
by a minus sign.)
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Ending cash balance
2nd Quarter 3rd Quarter
$ 410,000
$ 340,000
$ 321,000
$ 311,000
$
Garden Depot
Cash Budget
1st Quarter
2nd Quarter
47,000 $
290,000
337,000
351,000
(14,000)
24,000
24,000
10,000 $
4th Quarter
$ 360,000
$ 331,000
3rd Quarter
10,000 $
410,000
420.000
321,000
99,000
(24,000)
(1,440)
(25,440)
73,560
$
4th Quarter
73,560 $
340,000
413.560
311,000
102,560
0
102,560
$
102,560
360,000
462,560
331,000
131,560
0
131,560 $
Year
47,000
1,400,000
1,447,000
1,314,000
133,000
24,000
(24,000)
(1,440)
(1,440)
131,560
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