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 2nd Quarter $ 350,000 $ 393,000 3rd Quarter $ 400,000 $ 353,000 4th Quarter $ 420,000 $ 373,000 $ 470,000 $ 363,000 The company's beginning cash balance for the upcoming fiscal year will be $20,000. 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.) 2nd Quarter Answer is complete but not entirely correct. Garden Depot Cash Budget 1st Quarter Beginning cash balance Total cash receipts $ 20,000 $ 10,000 3rd Quarter $ 63,800 4th Quarter Year $ 98,800 $ 20,000 350,000 470,000 400,000 420,000 Total cash available 370,000 480,000 463,800 518,800 1,640,000 1,660,000 Total cash disbursements (393,000) (363,000) (353,000) Excess (deficiency) of cash available over disbursements (23,000) 117,000 110,800 (373,000) 145,800 (1,482,000) 178,000 Financing: 33,000 Borrowings Repayments 0 33,000 x Interest Total financing Ending cash balance 33,000 0 0x 0 0 × 0 33,000 33,000 0 0 0X $ 10,000 $ 150,000 $ 110,800 $ 145,800 $
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 2nd Quarter $ 350,000 $ 393,000 3rd Quarter $ 400,000 $ 353,000 4th Quarter $ 420,000 $ 373,000 $ 470,000 $ 363,000 The company's beginning cash balance for the upcoming fiscal year will be $20,000. 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.) 2nd Quarter Answer is complete but not entirely correct. Garden Depot Cash Budget 1st Quarter Beginning cash balance Total cash receipts $ 20,000 $ 10,000 3rd Quarter $ 63,800 4th Quarter Year $ 98,800 $ 20,000 350,000 470,000 400,000 420,000 Total cash available 370,000 480,000 463,800 518,800 1,640,000 1,660,000 Total cash disbursements (393,000) (363,000) (353,000) Excess (deficiency) of cash available over disbursements (23,000) 117,000 110,800 (373,000) 145,800 (1,482,000) 178,000 Financing: 33,000 Borrowings Repayments 0 33,000 x Interest Total financing Ending cash balance 33,000 0 0x 0 0 × 0 33,000 33,000 0 0 0X $ 10,000 $ 150,000 $ 110,800 $ 145,800 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
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.
Sales Budget and Selling
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.
Question
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:
Total cash receipts
Total cash disbursements
1st Quarter 2nd Quarter
$ 350,000
$ 393,000
3rd Quarter
$ 400,000
$ 353,000
4th Quarter
$ 420,000
$ 373,000
$ 470,000
$ 363,000
The company's beginning cash balance for the upcoming fiscal year will be $20,000. 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.)
2nd
Quarter
Answer is complete but not entirely correct.
Garden Depot
Cash Budget
1st
Quarter
Beginning cash balance
Total cash receipts
$ 20,000
$ 10,000
3rd
Quarter
$ 63,800
4th
Quarter
Year
$ 98,800 $ 20,000
350,000
470,000
400,000
420,000
Total cash available
370,000
480,000
463,800
518,800
1,640,000
1,660,000
Total cash disbursements
(393,000)
(363,000)
(353,000)
Excess (deficiency) of cash available over disbursements
(23,000)
117,000
110,800
(373,000)
145,800
(1,482,000)
178,000
Financing:
33,000
Borrowings
Repayments
0
33,000 x
Interest
Total financing
Ending cash balance
33,000
0
0x
0
0 ×
0
33,000
33,000
0
0
0X
$
10,000
$ 150,000
$ 110,800
$ 145,800
$
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