Exercise 8-7 (Algo) Cash Budget [LO8-8] 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: Total cash receipts Total cash disbursements 1st Quarter 2nd Quarter $ 480,000 $ 370,000 3rd Quarter $ 410,000 $ 360,000 4th Quarter $ 430,000 $ 380,000 $ 360,000 $ 400,000 The company's beginning cash balance for the upcoming fiscal year will be $18,000. 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: Prepare the company's cash budget for the upcoming fiscal year. (Repayments and interest should be indicated by a minus sign.) Answer is complete but not entirely correct. Garden Depot Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Beginning cash balance Total cash receipts $ 18,000 $ 10,000 $ 87,040 $ 137,040 $ 252,080 360,000 480,000 410,000 430,000 1,680,000 Total cash available 378,000 490,000 497,040 567,040 1,932,080 x Total cash disbursements 400,000 370,000 360,000 380,000 1,510,000 Excess (deficiency) of cash available over (22,000) 120,000 137,040 187,040 422,080 x disbursements Financing: Borrowings 32,000 Repayments Interest Total financing Ending cash balance 32,000 (32,000) (960) (32,000) (960) 32,000 10,000 $ (32,960) 87,040 0 0 (960) $ 137,040 $ 187,040 $ 421,120