Exercise 8-11 Cash Budget Analysis [LO8-8] A cash budget, by quarters, is given

Question

Exercise 8-11 Cash Budget Analysis [LO8-8]

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $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) 1 2 3 4 Year Cash balance, beginning $7 Add collections from customers 97 335 Total cash available 80 Less disbursements: Purchase of inventory 36 46 28 Selling and administrative expenses 30 30 117 Equipment purchases 7 10 11 38 Dividends 2 2 2 2 Total disbursements 88 Excess (deficiency) of cash available over disbursements (2) 17 Financing: Borrowings 16 Repayments (including interest) * (18) Total financing Cash balance, ending *Interest will total $1,000 for the year.

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $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.)

Explanation / Answer

CASH BUDGET Q-1 Q-2 Q-3 Q-4 YEAR Cash balance in beginning 7 8 8 8 7 Add: Collections from Customer 73 72 97 93 335 Total cash available 80 80 105 101 342 Less: Disbursement Purchase of inventory 36 46 45 28 155 Selling and admin expense 37 30 30 20 117 Equipment purchase 7 10 11 10 38 Dividend 2 2 2 2 8 Total Disbursement 82 88 88 60 318 Excess/(Deficiency) -2 -8 17 41 24 Financing: Borrowing 10 16 26 Repayments (Including interest) -9 -18 -27 Total Financing 10 26 17 0 -1 Cash balance, Ending 8 8 8 23 23

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