Why is M Gnatole Cash Budget Problem 1 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 $180,000 260.000 2nd Quarter $330,000 230,000 3rd Quarter $210,000 Q 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 12%. 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. Garden intends to make payments to retire loans whenever cash is available. 1. Prepare the company's cash budget for the upcoming fiscal year. 2. 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?

Why is M Gnatole Cash Budget Problem 1 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 $180,000 260.000 2nd Quarter $330,000 230,000 3rd Quarter $210,000 Q 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 12%. 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. Garden intends to make payments to retire loans whenever cash is available. 1. Prepare the company's cash budget for the upcoming fiscal year. 2. 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?

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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