A cash budget by quarters is given below for a retail compan

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $5,000 to start each quarter. Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.)

Cash Budget Quarter (000 omitted) 1 2 3 4 Year Cash balance, beginning $9 Add collections from customers 65 107 367 Total cash available 74 Less disbursements: Purchase of inventory 46 56 30 Selling and administrative expenses 27 32 30 109 Equipment purchases 9 9 21 49 Dividends 2 2 2 2 Total disbursements 84 99 Excess (deficiency) of cash available over disbursements (10) 9 Financing: Borrowings 7 Repayments (including interest) * (19) Total financing Cash balance, ending *Interest will total $1,000 for the year.

Solution

Cash Budget Quarter (000 omitted) 1 2 3 4 Year Cash balance, beginning $9 $5 $5 $5 $24 Add collections from customers 65 92 107 103 367 Total cash available $74 97 $112 108 $391 Less disbursements: Purchase of inventory 46 56 50 30 182 Selling and administrative expenses 27 32 30 20 109 Equipment purchases 9 9 21 10 49 Dividends 2 2 2 2 8 Total disbursements 84 99 103 62 348 Excess (deficiency) of cash available over disbursements ($10) ($2) $9 46 $43 Financing: Borrowings 15 7 22 Repayments (including interest) * -4 -19 -23 Total financing 15 7 -4 -19 -1 Cash balance, ending $5 $5 $5 27 *Interest will total $1,000 for the year.