Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated by a minus sign.)
Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated by a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Domestic
![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
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.
Total cash disbursements
Excess (deficiency) of cash available over
disbursements
Financing:
1st Quarter 2nd Quarter
$ 350,000 $ 470,000
$ 393,000 $363,000
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated
by a minus sign.)
Borrowings
Repayments
Interest
Total financing
Ending cash balance
$
3rd Quarter
$ 400,000
$ 353,000
Answer is not complete.
Garden Depot
Cash Budget
1st Quarter
$
2nd Quarter 3rd Quarter 4th Quarter
10,000 $ 10,000 $ 71,420 X $ 118,420
350,000✔ 470,000
400,000
420,000
360,000
480,000
471,420
538,420
(393,000)✓
(33,000)
(363,000) ✔
117,000
(353,000) ✔
118,420
(373,000)
165,420
43,000 X
43,000
10,000 $
4th Quarter
$ 420,000
$ 373,000
(43,000) X
(2,580) X
(45,580)
71,420
0
118,420
0
165,420
$
Year
10,000 X
1,640,000
1,650,000 X
(1,482,000)
168,000
43,000 X
(43,000) X
(2,580) X
$ 165,420](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcfc3fedd-b44a-4551-9fed-13649e143e43%2Fb52e3d24-cb62-4c2e-a402-f54f9feab811%2Fvqd5sf_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
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.
Total cash disbursements
Excess (deficiency) of cash available over
disbursements
Financing:
1st Quarter 2nd Quarter
$ 350,000 $ 470,000
$ 393,000 $363,000
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Repayments, interest, and cash deficiencies should be indicated
by a minus sign.)
Borrowings
Repayments
Interest
Total financing
Ending cash balance
$
3rd Quarter
$ 400,000
$ 353,000
Answer is not complete.
Garden Depot
Cash Budget
1st Quarter
$
2nd Quarter 3rd Quarter 4th Quarter
10,000 $ 10,000 $ 71,420 X $ 118,420
350,000✔ 470,000
400,000
420,000
360,000
480,000
471,420
538,420
(393,000)✓
(33,000)
(363,000) ✔
117,000
(353,000) ✔
118,420
(373,000)
165,420
43,000 X
43,000
10,000 $
4th Quarter
$ 420,000
$ 373,000
(43,000) X
(2,580) X
(45,580)
71,420
0
118,420
0
165,420
$
Year
10,000 X
1,640,000
1,650,000 X
(1,482,000)
168,000
43,000 X
(43,000) X
(2,580) X
$ 165,420
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