Forest Outfitters is a retailer that is preparing its budget for the upcoming fi

Question

Forest Outfitters is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:

The company's beginning cash balance for the upcoming fiscal year will be $63,800. The company requires a minimum cash balance of $31,700 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.1%. 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.

Complete the company's cash budget for the upcoming fiscal year. (Input all amounts as positive values except cash deficiency, repayments, and interest, which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

Forest Outfitters
Cash Budget

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter   Total cash receipts $ 411,000     $ 676,000     $ 428,000     $ 515,000       Total cash disbursements $ 523,000     $ 403,000     $ 401,000     $ 490,000    

Explanation / Answer

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Please find the answer as follows:

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1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Opening Cash Balance 63800 31700 223122 250122 Cash Receipts 411000 676000 428000 515000 Total Cash Available 474800 707700 651122 765122 Cash Disbursements 523000 403000 401000 490000 Deficiency -48200 304700 250122 275122 Financing



Borrowings (At Beginning) 79900 -
- Repayments (At Ending) - 79900
- Interest - 1678
- Total Financing 79900 -81578
- Cash Balance Ending 31700 223122 250122 275122

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