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Total cash receipts Total cash disbursements 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $ 180,000 $ 260,000 $ 330,000 $ 210,000 $ 230,000 $ 230,000 $ 220,000 $ 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 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 receipts Total cash disbursements 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $ 180,000 $ 260,000 $ 330,000 $ 210,000 $ 230,000 $ 230,000 $ 220,000 $ 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 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $ 180,000 2nd Quarter 3rd Quarter $ 330,000 4th Quarter $ 260,000 $ 230,000 $ 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 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. Note: Repayments, interest, and cash deficiencies should be indicated by a minus sign. Answer is not complete. Garden Depot Cash Budget 1st Quarter 2nd Quarter Beginning cash balance Total cash receipts $ 20,000 $ 10,000 $ 3rd Quarter 35,800 4th Quarter Year S 25,800 $ 180,000 330,000 210,000 Total cash available 200,000 340,000 245,800 230,000 255,800 91,600 x 950,000 1,041,600x Total cash disbursements 260,000 230,000 220,000 240,000 950,000✓ Excess (deficiency) of cash available over disbursements (60,000) 110,000 25,800 15,800 91,600 x Financing: Borrowings Repayments Interest Total financing Ending cash balance 70,000 (70,000) (4,200) (4,200) 70,000 $ 10,000 $ (74,200) 35,800 0 0 (74,200) x 25,800 $ 15,800 70,000 (70,000)
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 $ 180,000 2nd Quarter 3rd Quarter $ 330,000 4th Quarter $ 260,000 $ 230,000 $ 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 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. Note: Repayments, interest, and cash deficiencies should be indicated by a minus sign. Answer is not complete. Garden Depot Cash Budget 1st Quarter 2nd Quarter Beginning cash balance Total cash receipts $ 20,000 $ 10,000 $ 3rd Quarter 35,800 4th Quarter Year S 25,800 $ 180,000 330,000 210,000 Total cash available 200,000 340,000 245,800 230,000 255,800 91,600 x 950,000 1,041,600x Total cash disbursements 260,000 230,000 220,000 240,000 950,000✓ Excess (deficiency) of cash available over disbursements (60,000) 110,000 25,800 15,800 91,600 x Financing: Borrowings Repayments Interest Total financing Ending cash balance 70,000 (70,000) (4,200) (4,200) 70,000 $ 10,000 $ (74,200) 35,800 0 0 (74,200) x 25,800 $ 15,800 70,000 (70,000)
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