Jardin & Co. is a retailer that is preparing its budget for the upcoming fiscal yea Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter 2nd Quarter $180,000 250,000 $320,000 230,000 3rd Quarter $210,000 220,000 4th Quarter $230,000 240,000 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 an annual interest rate of 10%. 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. Jardin intends to make payments to retire loans whenever cash is available. Required: Prepare the company's cash budget for the upcoming fiscal year. How does the fourth-quarter ending cash balance change if interest on borrowing is accrued until the end of the fourth quarter and total borrowings and interest are paid in full at that time?
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.
![Jardin & Co. is a retailer that is preparing its budget for the upcoming fiscal yea
Management has prepared the following summary of its budgeted cash flows:
Total cash receipts
Total cash disbursements
1st Quarter 2nd Quarter
$180,000
250,000
$320,000
230,000
3rd Quarter 4th Quarter
$210,000
220,000
$230,000
240,000
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 an annual interest rate of 10%.
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. Jardin intends to make
payments to retire loans whenever cash is available.
Required:
Prepare the company's cash budget for the upcoming fiscal year. How does the
fourth-quarter ending cash balance change if interest on borrowing is accrued
until the end of the fourth quarter and total borrowings and interest are paid in
full at that time?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb68a88c7-1619-44b1-a214-1d530c28d190%2F846f1e89-768d-4aac-b3dc-043c2dc1343a%2Fh17ebpo_processed.jpeg&w=3840&q=75)
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