Q1) Garden Depot is retailer which is preparing its budget for upcoming fiscal year. Management has prepared following summary of its budgeted cash flows:
| |
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
| Total cash receipts |
$180,000 |
$330,000 |
$210,000 |
$230,000 |
| Total cash disbrusements |
$260,000 |
$230,000 |
$220,000 |
$240,000 |
Company starting cash balance for upcoming fiscal year will be $20,000. Company needs minimum cash balance of $10,000 and may borrow any amount required from a local bank at the annual interest rate of 12%. Company may borrow any amount at the starting 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 time it is repaid.
problem:
Create company cash budget for upcoming fiscal year.