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:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Total cash receipts	$290,000	$410,000	$340,000	$360,000
Total cash disbursements	$351,000	$321,000	$311,000	$331,000

The company’s beginning cash balance for the upcoming fiscal year will be $47,000. 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.

complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)

	Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning cash balance Total cash receipts Total cash available Less total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance

Answer 1

		Garden Depot
		Cash Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning cash balance	47000	10000	74280	103280	47000
Total cash receipts	290000	410000	340000	360000	1400000
Total cash available	337000	420000	414280	463280	1447000
Less total cash disbursements	-351000	-321000	-311000	-331000	-1314000
Excess (deficiency) of cash available over disbursements	-14000	99000	103280	132280	133000
Financing:
Borrowings	24000				24000
Repayments		-24000			-24000
Interest (24000 x 3%)		-720			-720
Total financing	24000	-24720			-720
Ending cash balance	10000	74280	103280	132280	132280