A cash budget, by quarters, is given below for a retail company (000 omitted). T

Question

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $6,000 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) Year Cash balance, beginning Add collections from customers Total cash available Less disbursements 104 370 86 43 35 Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 53 30 18 2 32 118 15 51 95 Total disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings (19) Repayments (including interest) Total financing Cash balance, ending "Interest will total $1,000 for the year

Explanation / Answer

Solution:

Cash Budget (In '000) Particulars Q1 Q2 Q3 Q4 Year Cash balance, beginning $6.00 $6.00 $6.00 $6.00 $6.00 Add: Collection from customers $80.00 $86.00 $104.00 $112.00 $382.00 Total Cash Available $86.00 $92.00 $110.00 $118.00 $388.00 Less: Disbursement Purchase of inventory $43.00 $53.00 $49.00 $35.00 $180.00 Selling and administrative expenses $34.00 $32.00 $30.00 $22.00 $118.00 Equipment purchases $15.00 $8.00 $18.00 $10.00 $51.00 Dividends $2.00 $2.00 $2.00 $2.00 $8.00 Total disbursements $94.00 $95.00 $99.00 $69.00 $357.00 Excess (Deficiency) of cash available over disbursement -$8.00 -$3.00 $11.00 $49.00 $31.00 Financing: Borrowings $14.00 $9.00 $0.00 $0.00 $23.00 Repayments (Including Interest) $0.00 $0.00 -$5.00 -$19.00 -$24.00 Total financing $14.00 $9.00 -$5.00 -$19.00 -$1.00 Cash balance, ending $6.00 $6.00 $6.00 $30.00 $30.00

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