Question
Cove Company is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash
Cove Company is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |
| Total Cash Receipts | $200,000 | $350,000 | $230,000 | $250,000 |
| Total Cash Disbursements | $274,000 | $244,000 | $234,000 | $254,000 |
The companys beginning cash balance for the upcoming fiscal year will be $24,000. 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.
Required:
What is the ending cash balance in the First Quarter
What is the ending cash balance in the Second Quarter
What is the Beginning Cash Balance for the Year
What is the Ending Cash Balance for the Year
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
