Garden Depot is a retaller that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter $ 280,000 $ 344,000 Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest 2nd Quarter $ 400,000 $ 314,000 The company's beginning cash balance for the upcoming fiscal year will be $45,000. 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 repald. For simplicity, assume that interest is not compounded. Total financing Ending cash balance Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, Interest, and cash deficiencies should be indicated by a minus sign.) 3rd Quarter $ 330,000 $ 384,000 4th Quarter $ 350,000 $ 324,000 Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Garden Depot is a retaller that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows: Total cash receipts Total cash disbursements 1st Quarter $ 280,000 $ 344,000 Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest 2nd Quarter $ 400,000 $ 314,000 The company's beginning cash balance for the upcoming fiscal year will be $45,000. 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 repald. For simplicity, assume that interest is not compounded. Total financing Ending cash balance Required: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, Interest, and cash deficiencies should be indicated by a minus sign.) 3rd Quarter $ 330,000 $ 384,000 4th Quarter $ 350,000 $ 324,000 Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Chapter6: Managing Cash Flow
Section: Chapter Questions
Problem 1EP
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Transcribed Image Text:Garden Depot is a retaller that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary
of its budgeted cash flows:
Total cash receipts
Total cash disbursements
1st Quarter
$ 280,000
$ 344,888
Beginning cash balance
Total cash receipts
Total cash available
Total cash disbursements
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
Repayments
Interest
2nd Quarter
$ 480,000
$ 314,000
The company's beginning cash balance for the upcoming fiscal year will be $45,000. 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.
Total financing
Ending cash balance
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Repayments, Interest, and cash deficiencies should be indicated
by a minus sign.)
3rd Quarter
$ 330,000
$ 384,000
Garden Depot
Cash Budget
1st Quarter
4th Quarter
$ 350,000
$ 324,000
2nd Quarter
3rd Quarter 4th Quarter
Year
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