Question
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
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:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
|---|---|---|---|---|
| Total cash receipts | $ 300,000 | $ 420,000 | $ 350,000 | $ 370,000 |
| Total cash disbursements | $ 358,000 | $ 328,000 | $ 318,000 | $ 338,000 |
The companys beginning cash balance for the upcoming fiscal year will be $35,000. 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 companys cash budget for the upcoming fiscal year.
Note: Repayments, interest, and cash deficiencies should be indicated by a minus sign.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cost Accounting
Authors: Les Heitger, Pekin Ogan, Serge Matulich
2nd Edition
053881764X, 978-0538817646
