Garden Depot is a retailer that is preparin of its budgeted cash flows g its bud
ID: 2562208 • Letter: G
Question
Garden Depot is a retailer that is preparin of its budgeted cash flows g its budget for the upcoming fiscal year. Management has prepared the following summary 3rd 4th Quarter Quarter QuarterQuarter Total cash receipts $220, 000 $370,000 $250, 000 $270,000 Total cash disbursements $288,000 $258,000 $248,000 $268,000 ook The company's beginning cash balance for the upcoming fiscal year will be $28,000. 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 39 The company may borrow an 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 nt encesExplanation / Answer
Garden Depot Cash Budget Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning cash balance 28,000 10,000 69,000 71,000 28,000 Total cash receipt 220,000 370,000 250,000 270,000 1,110,000 Total cash available 248,000 380,000 319,000 341,000 1,138,000 Total cash disbursement 288,000 258,000 248,000 268,000 1,062,000 Excess of cash available over disbursment (40,000) 122,000 71,000 73,000 76,000 Financing Borrowing 50,000 - - - 50,000 Repayment - (53,000) - - (53,000) Interest (1,500) (1,500) - - (3,000) Total Financing 50,000 (53,000) - - (3,000) Ending cash balance 10,000 69,000 71,000 73,000 73,000
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