Question
Garden Depot is a retailer that provided the following budgeted cash flows for next year. 1 st Quarter 2 nd Quarter 3 rd Quarter 4
Garden Depot is a retailer that provided the following budgeted cash flows for next year.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Total cash receipts $320,000 $440,000 $370,000 $390,000
Total cash disbursements $372,000 $342,000 $332,000 $352,000
The companys beginning cash balance for the next year will be $27,000. The company requires a minimum cash balance of $10,000 and may borrow money at the beginning of any quarter and may repay any part of its loan at the end of any quarter. Interest payments based on quarterly interest rate of 3% are due on any principal at the time it is repaid. For simplicity, assume interest is not compounded.
Required:
Prepare the companys cash budget for the next year.
Note: repayments, intertest and cash deficiencies should be indicated by a minus sign.
Garden Depot
Cash Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Beginning Cash Balance
Total cash receipts
Total cash available
Total cash disbursements
Excess (deficiency of cash available over disbursements)
Financing:
Borrowings
Repayments
Interest
Total Financing
Ending Cash Balance
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