Forest Outfitters is a retailer that is preparing its budget for the upcoming fi
ID: 2478326 • 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:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total cash receipts
$ 447,000
$ 686,000
$ 426,000
$ 518,000
Total cash disbursements
$ 524,000
$ 405,000
$ 437,000
$ 474,000
The company's beginning cash balance for the upcoming fiscal year will be $52,600. The company requires a minimum cash balance of $30,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.7%. 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. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total cash receipts
$ 447,000
$ 686,000
$ 426,000
$ 518,000
Total cash disbursements
$ 524,000
$ 405,000
$ 437,000
$ 474,000
The company's beginning cash balance for the upcoming fiscal year will be $52,600. The company requires a minimum cash balance of $30,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 2.7%. 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. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)
Explanation / Answer
1st Quarter
2nd Quarter
Total cash receipts
Less total cash disbursements
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings (at beginning)
Repayments (at ending)
Interest
Total financing
Cash balance, ending
1st Quarter
2nd Quarter
3rd ouarter 4th Quarter Beginning Balance $52,600 $30,000 $253,684 $242,684Total cash receipts
$447,000 $686,000 $426,000 $518,000 Total Cash available $499,600 $716,000 $679,684 $760,684Less total cash disbursements
$ 524,000 $ 405,000 $437,000 $474,000Excess (deficiency) of cash available over disbursements
($24,400) $311,000 $242,684 $286,684Financing:
Borrowings (at beginning)
$54,400 0 0 0Repayments (at ending)
0 ($54,400) 0 0Interest
0 -($2,916) 0 0Total financing
$54,400 ($57,316) 0 0Cash balance, ending
$30,000 $253,684 $242,684 $286,684