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 3rd Quarter $ 480,000 $ 370,000 $ 410,000 $360,000 $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, interest, and cash deficiencies should be indicated by a minus sign.) Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Garden Depot Cash Budget 1st Quarter 0 0 2nd Quarter 4th Quarter $ 430,000 $ 380,000 0 0 3rd Quarter 0 0 4th Quarter 0 0 Year

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
$ 360,000
$ 400,000
2nd Quarter
$ 480,000
$ 370,000
Beginning cash balance
Total cash receipts
Total cash available
Total cash disbursements
Excess (deficiency) of cash available over disbursements
Financing:
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, interest, and cash deficiencies should be
indicated by a minus sign.)
Garden Depot
Cash Budget
1st Quarter
3rd Quarter
$ 410,000
$ 360,000
0
0
2nd Quarter
4th Quarter
$ 430,000
$ 380,000
0
0
3rd Quarter
0
0
4th Quarter
0
0
Year
Transcribed Image Text: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 $ 360,000 $ 400,000 2nd Quarter $ 480,000 $ 370,000 Beginning cash balance Total cash receipts Total cash available Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: 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, interest, and cash deficiencies should be indicated by a minus sign.) Garden Depot Cash Budget 1st Quarter 3rd Quarter $ 410,000 $ 360,000 0 0 2nd Quarter 4th Quarter $ 430,000 $ 380,000 0 0 3rd Quarter 0 0 4th Quarter 0 0 Year
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