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 2nd Quarter 3rd Quarter 4th Quarter $280,000 430,000 310,000 330,000 330,000 300,000290,000 310,000 The company's beginning cash balance for the upcoming fiscal year will be $40,000. 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: Prepare the company's cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)

Explanation / Answer

Dear Student Thank you for using Chegg Garden Depot Please find below the answer Cash Budget Statementshowing Computations Paticulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning Cash Balance                 40,000.00                10,000.00             119,400.00             139,400.00                 40,000.00 Total cash receipts               280,000.00             430,000.00             310,000.00             330,000.00           1,350,000.00 Total cash available               320,000.00             440,000.00             429,400.00             469,400.00           1,390,000.00 Total cash disbursements               330,000.00             300,000.00             290,000.00             310,000.00           1,230,000.00 Excess of cash available over disbursements               (10,000.00)             140,000.00             139,400.00             159,400.00              160,000.00 Financing :   Borrowings                   20,000.00                               -                                 -                                 -                   20,000.00 Repayments                                -               (20,000.00)                               -                                 -                (20,000.00) Interest                                -                     (600.00)                               -                                 -                      (600.00) Total Financing                 20,000.00             (20,600.00)                               -                                 -                      (600.00) Ending Cash Balance                 10,000.00             119,400.00             139,400.00             159,400.00              159,400.00

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