cash budget by quarters is given below for a retail company

cash budget, by quarters, is given below for a retail company (000 omitted), The company requires a minimum cash balance of a east $8,000 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.) Quarter (000 omitted) Year 565 85 Cash balance, beginning Add collections from customers Total cash available Less disbursements: 100 356 108 39 31 Purchase of inventory Selling and administrative expenses Equipment purchases 49 30 10 30 123 14 10 45 91 Total disbursements Excess (deficiency) of cash available over disbursements Financing 15 Borrowings 13 (19) Repayments (including interest) Total financing Cash balance, ending Interest will total $1,000 for the year

Solution

1

2

3

4

Year

Cash Bal. Beg

6

8

8

8

6

Add: Collections from Customers

82

78

100

96

356

Less: Disbursements

Purchase of Inventory

39

49

47

31

166

S and A

40

30

30

23

123

Eq Purchases

11

10

14

10

45

Dividends

2

2

2

2

8

Total

92

91

93

66

342

Excess(deficiency) of cash available over disbursements

(4)

(5)

15

38

20

Financing:

Borrowings

12

13

0

0

25

Repayments(incl interest)

0

0

(7)

(19)

(26)

Total Financing

12

13

(7)

(19)

(1)

Cash Balance Ending

8

8

8

19

19

* Interest Paymnets of 1000

All numbers have been obtained by simple +,-

For eg. Negative cash balance of 4 in Quarter 1 which means collections are 4000 less than paymnets, hence payment for Selling and Administrative Expenses being 40

2. Total Selling expenses for Year is 123, from which we can calculate Selling Expenses for 4th Quarter

	1	2	3	4	Year
Cash Bal. Beg	6	8	8	8	6
Add: Collections from Customers	82	78	100	96	356
Less: Disbursements
Purchase of Inventory	39	49	47	31	166
S and A	40	30	30	23	123
Eq Purchases	11	10	14	10	45
Dividends	2	2	2	2	8
Total	92	91	93	66	342
Excess(deficiency) of cash available over disbursements	(4)	(5)	15	38	20
Financing:
Borrowings	12	13	0	0	25
Repayments(incl interest)	0	0	(7)	(19)	(26)
Total Financing	12	13	(7)	(19)	(1)
Cash Balance Ending	8	8	8	19	19