27. is a retailer that is preparing its budget for the upcoming fiscal year. Man

Question

27. is a retailer that is preparing its budget for the upcoming fiscal year. Management has Forest Outfitters prepared the following summary of its budgeted cash flows Total cash receipts Total cash disbursements $ 340,000 $670,000$410,000$ 470,000 $ 530,000$ 450,000 $430,000 $480,000 The company's beginning cash balance for the upcoming fiscal year will be $50,000. The company requires a minimum cash balance of $30,000 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. Required: Complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.) Forest Outfitters Cash Budget 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Year Cash balance, beginning Total cash receipts Total cash available Less total cash disbursements Excess of cash available over disbursements Financing Borrowings Repayments Interest Total financing Cash balance, ending

Explanation / Answer

Cash budget :

1st quarter 2nd quarter 3rd quarter 4th quarter Year Cash balance, beginning 50000 30000 74900 54900 50000 Total cash receipts 340000 670000 410000 470000 1890000 Total cash available 390000 700000 484900 524900 1940000 Less; Total cash disbursement -530000 -450000 -430000 -480000 -1890000 Excess of cash available over disbursement -140000 250000 54900 44900 50000 Financing Borrowings 170000 170000 Repayments -170000 -170000 Interest -5100 -5100 Total financing 170000 -175100 0 0 -5100 Cash balance, ending 30000 74900 54900 44900 44900

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