125999 Garden Depot is a retailer that is preparing its budg

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: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter s 290, 000 440, 000 $320, 000 $340, 000 Total cash receipts Total cash disbursements $337,000 $307,000 $ 297,000 317,000 The company\'s beginning cash balance for the upcoming fiscal year will be $42,000. 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. Prepare the company\'s cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.) Cash Budget 1st 2nd 3rd 4th cash available Total cash di

Solution

Garden Depot

Cash Budget

1^st Quarter

2^nd Quarter

3^rd Quarter

4^th Quarter

Year

Beginning cash balance

42,000

10,000

127,100

150,100

42,000

Total cash receipts

290,000

440,000

320,000

340,000

1,390,000

Total cash available

332,000

450,000

447,100

490,100

1,432,000

Less: Total cash disbursements

337,000

307,000

297,000

317,000

1,258,000

Excess of cash available over disbursements

-5,000

143,000

150,100

173,100

174,000

Financing

Borrowings*

15,000

-

0

0

15,000

Repayments

-

-15,000

0

0

-15,000

Interests**

-

-900

0

0

-900

Total Financing

15,000

-15,900

0

0

-900

Ending cash balance

10,000

127,100

150,100

173,100

173,100

*Amount to be borrowed to maintain closing cash balance of $10,000 = $15,000

**Interest= $15,000 x 3% x 2 Quarter = $900

Garden Depot
Cash Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning cash balance	42,000	10,000	127,100	150,100	42,000
Total cash receipts	290,000	440,000	320,000	340,000	1,390,000
Total cash available	332,000	450,000	447,100	490,100	1,432,000
Less: Total cash disbursements	337,000	307,000	297,000	317,000	1,258,000
Excess of cash available over disbursements	-5,000	143,000	150,100	173,100	174,000
Financing
Borrowings*	15,000	-	0	0	15,000
Repayments	-	-15,000	0	0	-15,000
Interests**	-	-900	0	0	-900
Total Financing	15,000	-15,900	0	0	-900
Ending cash balance	10,000	127,100	150,100	173,100	173,100