accounting garden depot

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	$240,000    	$390,000    	$270,000    	$290,000
  Total cash disbursements	$302,000    	$272,000    	$262,000    	$282,000


The company’s beginning cash balance for the upcoming fiscal year will be $32,000. 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:
Complete the company's cash budget for the upcoming fiscal year. (Cash deficiency, repayments, and interest, should be indicated by a minus sign.)

Answer	Garden Depot
Cash Budget
1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Total
Beginning Cash Balance		32000	       10,000	      85,600	      93,600	32000
Total Cash receipts		240000	390000	270000	290000	1190000
Total Cash available		272000	400000	355600	383600	1222000
Less: Total cash disbursment		302000	272000	262000	282000	1118000
Excess of cash available for disbursement		      (30,000)	     128,000	      93,600	    101,600	     104,000
Financing
Borrowing		40000	0	0	0	40000
Repayments		0	      (40,000)	0	0	      (40,000)
Interest		0	       (2,400)	0	0	       (2,400)
Total Financing		40000	      (42,400)	0	0	       (2,400)
Ending Cash Balance		       10,000	       85,600	      93,600	    101,600	     101,600