Garden Depot is a retailer that is preparing its budget for the upcoming fiscal

Question

Garden Depot is a retailer 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 $270,000 $323,000 2nd Quarter $420,000 $293,000 3rd Quarter $300,000 $283,000 4th Quarter $320,000 $303,000 The company's beginning cash balance for the upcoming fiscal year will be $38,000. 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 Required Complete the company's cash budget for the upcoming fiscal year. (Cash deficiencies, disbursements, repayments, and interest should be indicated by a minus sign.) Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning cash balance Total cash receipts Total cash available Less total cash disbursements Excess of cash available over disbursements Financing 0 0 0 Borrowings Repayments Interest Total financing 0 0 0 0 0 Ending cash balance

Explanation / Answer

430000

Cash budget 1 2 3 4 year Beginning cash balance 38000 10000 110500 127500 286000 Total cash receipts 270000 420000 300000 320000 1310000 Total cash available 308000

430000

410500 447500 1596000 less:cash disbursement (323000) (293000) (283000) (303000) (1202000) excess of cash over disbursement( (15000) 137000 127500 144500 394000 Financing Borrowing 25000 25000 Repayment (25000) (25000) Interest (1500) [25000*.03*2 ] (1500) Total Financing 25000 (26500) (1500) Ending cash balance 10000 110500 127500 144500 392500

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