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 $5,000 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.) Cash Budget Quarter (000 omitted) 2 4 Year Cash balance, beginning Add collections from customers Total cash available Less disbursements 97 335 80 28 46 30 10 2 36 Purchase of inventory Selling and administrative expenses Equipment purchases Dividends 30 38 2 2 2 Total disbursements Excess (deficiency) of cash available over disbursements Financing 16 Borrowings (15) Repayments (including interest) * Total financing Cash balance, ending *Interest will total $1,000 for the year.

Explanation / Answer

CASH BUDGET QUARTER 1 2 3 4 YEAR Cash Balance, Beginning 7 5 5 5 7 Add: Collection from Customer 73 (80-7) 72(77-5) 97 93(335-73-72-97) 335 Total cash Available 80 77(88-11) 102 98 342 Less: Disbursement: Purchase of Inventory 36 46 45(88-30-11-2) 28 155 Selling and Admin Expense 37(82-36-7-2) 30 30 20(117-37-30-30) 117 Equipment Purchase 7 10 11 10(38-7-10-11) 38 Dividend Paid 2 2 2 2 8 Total Disbursement 82(80+2) 88 88(102-14) 60 318 Excess(Deficiency)of cash avialable -2 -11 14 38 24 Financing: Borrowings 7 (82+5-80) 16 23 Repayment(Incl. Interest) -9 -15 -24 Total Financing 7 16 -9 -15 -1 Cash Balance, Ending 5 5 5 23 23

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