Question

Beasley Company prepared a cash budget by quarters for the upcoming year. Missing data amounts are indicated with question marks or lower case letters; these lower case letters will be referred to in the questions that follow.

Beasley requires a minimum balance of $10,000 to start a quarter.

All data are in thousands.

Beasley Corporation
Cash Budget

	QTR 1	QTR 2	QTR 3	QTR 4
Cash balance, beginning	$16	$ e	$13	$10
Add collections from customers	a	70	67	80
Total cash available	?	?	80	90
Less disbursements:
Purchase of inventory	31	c	40	35
Operating expenses	25	22	?	15
Equipment purchases	10	14	19	0
Dividends	0	6	0	5
Total disbursements	66	?	f	55
Excess (deficiency) of cash available       over disbursements	7	17	(2)	35
Financing:
Borrowings:	b	--	12	--
Repayments (including interest)	--	d	--	(12)
Total financing	?	?	12	(12)
Cash balance, ending	$10	$?	$10	$23
	====	====	====	====

a. The collections from customers during the first quarter (item a) are: $50, $60, $57, or $73?

b. The borrowing required during the first quarter to meet the minimum cash balance (item b) is: $0, $7, $10, or $3?

c. The cash disbursed for purchases during the second quarter (item c) is: $55, $9, $13, or $21?

d. The repayment (including interest) of financing during the second quarter (item d) is: $4, $0, $17 or $7?

e. The total disbursements during the third quarter (item f) is: $84, $78, $82, or $59?

f. The cash balance at the beginning of the second quarter (item e) is: $10, $14, $0 or $7?

Answer 1

• All working forms part of the answer
• Cash Budget missing places have been filled. Working column will assist and checking the accuracy.
• Working

Working		QTR 1	QTR 2	QTR 3	QTR 4
A	Cash balance, beginning	$                  16.00	$                10.00	$                    13.00	$                 10.00
B	Add collections from customers	$                  57.00	$                70.00	$                    67.00	$                 80.00
C=A-B	Total cash available	$                  73.00	$                80.00	$                    80.00	$                 90.00
	Less disbursements:
D	Purchase of inventory	$                  31.00	$                21.00	$                    40.00	$                 35.00
E	Operating expenses	$                  25.00	$                22.00	$                    23.00	$                 15.00
F	Equipment purchases	$                  10.00	$                14.00	$                    19.00	$                        -
G	Dividends	$                         -	$                   6.00	$                           -	$                    5.00
H=D+E+F+G	Total disbursements	$                  66.00	$                63.00	$                   82.00	$                 55.00
I=C-H	Excess (deficiency) of cash available over disbursements	$                    7.00	$                17.00	$                    (2.00)	$                 35.00
	Financing:
J	Borrowings:	$                    3.00	--	$                    12.00	--
K	Repayments (including interest)	--	$                (4.00)	--	$               (12.00)
L=J+K	Total financing	$                    3.00	$                (4.00)	$                    12.00	$               (12.00)
M=I + L	Cash balance, ending	$                  10.00	$                13.00	$                    10.00	$                 23.00

• Answers on the basis of Above workings

a. The collections from customers during the first quarter (item a) are: $57

b. The borrowing required during the first quarter to meet the minimum cash balance (item b) is: $3

c. The cash disbursed for purchases during the second quarter (item c) is: $21

d. The repayment (including interest) of financing during the second quarter (item d) is: $4

e. The total disbursements during the third quarter (item f) is: $82

f. The cash balance at the beginning of the second quarter (item e) is: $10