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 $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) 2 Cash balance, beginning Add collections from customers Total cash available Less disbursements: 7 73 80 97 335 Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 36 37 7 46 28 30 10 38 2 2 Total disbursements Excess (deficiency) of cash available over disbursements Financing: 82 17 Borrowings Repayments (including interest) Total financing Cash balance, ending Interest will total $1.000 for the year (18)

Explanation / Answer

CASH BUDGET Q1 Q2 Q3 Q4 TOTAL Cash balance begininig 7 8 8 8 7 Add: Collections from customer 73 72 97 93 335 Total cash availlable 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 purchasae 7 10 11 10 38 Dividend 2 2 2 2 8 Total Disbursement 82 88 88 60 318 Excess of cash available ovr disbursement -2 -8 17 41 24 Financing: Borrowings 10 16 26 Repayment including interest -9 -18 -27 Total financing 10 26 17 0 0 Cash balance, ending 8 8 8 23 23

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