EXERCISE 97 Cash Budget Analysis L02 A cash budget by quarte

EXERCISE 9-7 Cash Budget Analysis [L02] A cash budget, by quarter, is given below for a retail company (000 omitted). The company requires a minimum cash balance of $5,000 to start each quarter. Fill in the missing amounts in the table that follows: Quarter Add collections from customers Total cash available Less disbursements ..?... $6 s? s? s? ? 96 ? ??? ? 71 n ? 3545 Purchases of inventory.. Selling and atrinistrative expenses Equipment purchases 85-7 ? Excess (deficiency) of cash avalable oerdisbursemets. Repayments, Total financing ash balance, ending for thisaerse assume there will benorterestanay borrowings 9 23 EYERCISE Dron aria Flexible Bud et IL03-

Solution

Quarter (000 omitted) 1 2 3 4 Year Cash balance, beginning $                      6 $              5 $                        5 $                             5 $             6 Add collections from customers                        65                70                          96                               92            323 Total cash available                        71                75                        101                               97            329 Less disbursements: Purchase of inventory                        35                45                          48                               35            163 Selling and administrative expenses                        28                30                          30                               25            113 Equipment purchases                          8                  8                          10                               10               36 Dividends                          2                  2                             2                                 2                 8 Total disbursements                        73                85                          90                               72            320 Excess (deficiency) of cash available over disbursements                        (2)             (10)                          11                               25                 9 Financing: Borrowings                          7                15                           -                                  -                 22 Repayments *                         -                   -                            (6)                             (16)            (22) Total financing                          7                15                          (6)                             (16)                -   Cash balance, ending $                      5 $              5 $                        5 $                             9 $             9 Hint 71-6 = 65 15-5 = 10 96+5 = 101 113-28-30-30 = 25 71+2 = 73 85-10 = 75 101-11 = 90 36-8-8-10 = 10 73-35-8-2 = 28 75-5 = 70 90-30-10-2 = 48 323-65-70-96 = 92 5-(-2) = 7 11-5 = 6 92+5 = 97 35+25+10+2 = 72 97-72 = 25 15+7-6 = 16 25-16 = 9