Forest Outfitters is a retailer that is preparing its budget for the upcoming fi
ID: 2454091 • Letter: F
Question
Forest Outfitters is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
The company's beginning cash balance for the upcoming fiscal year will be $58,300. The company requires a minimum cash balance of $30,200 and may borrow any amount needed from a local bank at a quarterly interest rate of 1.9%. 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.
Complete the company's cash budget for the upcoming fiscal year.(Input all amounts as positive values except cash deficiency, repayments, and interest, which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to the nearest dollar amount. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed.)
Forest Outfitters
Cash Budget
Forest Outfitters is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
Explanation / Answer
Ans) Forest Outfitters Cash Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Cash balance, beginning $ 58,300 $ 30,200 $ 238,244 $ 188,244 $ 58,300 Total cash receipts $ 423,000 $ 696,000 $ 427,000 $ 531,000 $ 2,077,000 Total cash available $ 481,300 $ 726,200 $ 665,244 $ 719,244 $ 2,135,300 Less total cash disbursements $ (530,000) $ (406,000) $ (477,000) $ (482,000) $ (1,895,000) Excess (deficiency) of cash available over disbursements $ (48,700) $ 320,200 $ 188,244 $ 237,244 $ 240,300 Financing: Borrowings (at beginning) $ 80,428 $ 80,428 Repayments (at ending) $ (80,428) $ (80,428) Interest $ (1,528) $ (1,528) $ (3,056) Total financing $ 78,900 $ (81,956) Cash balance, ending $ 30,200 $ 238,244 $ 188,244 $ 237,244 $ 237,244 WN-1 Borrowing Amount is Deficiency Cash + Minimum Cash balances = ($30,200+$48,700) Interest = 1.9 Borrowing Account = $78,900*100/98.1 = $ 80,428.13