Chapter 8, Problem 7E

Cash Budget LOB—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:

The company’s beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of S 10,000 and mayborrow 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 mayrepay 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 thatinterest is not compounded.
Required:
Using Schedule 8 as your guide, prepare the company’s cash budget for the upcoming fiscal year.