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Homework answers / question archive / Exercise 8-11 (Algo) Cash Budget Analysis (LO8-8) 6 A cash budget, by quarters, is given below for a retail company (O00 omitted)

Exercise 8-11 (Algo) Cash Budget Analysis (LO8-8) 6 A cash budget, by quarters, is given below for a retail company (O00 omitted)

Accounting

Exercise 8-11 (Algo) Cash Budget Analysis (LO8-8) 6 A cash budget, by quarters, is given below for a retail company (O00 omitted). The company requires a minimum cash balance of at Jeast $8,000 to start each quarter. Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.) points Quarter (000 omitted) (000 omitted) Year 1 2 3 $ 6 eBook 120 415 79 Print 55 65 31 45 30 References 119 13 9 30 62 Cash balance beginning Add collections from customers Total cash available Los disbursements Purchase of inventory Selling and administrative expenses Equipment purchases Dividends Total disbursements Excess (deficiency of cash available over disbursements Financing Borrowings Repayments (including interest) Total financing Cash balapce, ending "Interest will total $1,000 for the year. 2 2 2 121 11 11 (28)

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Answer

  • Requirement asked
 

Quarter (000 omitted)

(000 omitted)

 

1

2

3

4

Year

Cash balance, beginning

$6

$8

$8

$8

$6

Add collections from customers

$73

$110

$120

$112

$415

Total cash available

$79

$118

$128

$120

$421

Less disbursements:

         

Purchase of inventory

$55

$65

$55

$31

$206

Selling and administrative expenses

$20

$45

$30

$24

$119

Equipment purchases

$13

$9

$30

$10

$62

Dividends

$2

$2

$2

$2

$8

Total disbursements

$90

$121

$117

$67

$395

Excess (deficiency) of cash available over disbursements

($11)

($3)

$11

$53

$26

Financing:

         

Borrowings

$19

$11

$0

$0

$30

Repayments (including interest) *

$0

$0

($3)

($28)

($31)

Total financing

$19

$11

($3)

($28)

($1)

Cash balance, ending

$8

$8

$8

$25

$25

*Interest will total $1,000 for the year.

         

 

  • Calculation
 

Quarter (000 omitted)

(000 omitted)

 

1

2

3

4

Year

Cash balance, beginning

6

8

8

8

6

Add collections from customers

=79-6

=118-8

120

=415-120-110-73

415

Total cash available

79

=121-3

=120+8

=8+112

=415+6

Less disbursements:

         

Purchase of inventory

55

65

=117-30-30-2

31

=55+65+55+31

Selling and administrative expenses

=90-13-2-55

45

30

=119-30-45-20

119

Equipment purchases

13

9

30

=62-30-9-13

62

Dividends

2

2

2

2

=2+2+2+2

Total disbursements

=79+11

121

=128-11

=31+24+10+2

=206+119+62+8

Excess (deficiency) of cash available over disbursements

-11

=8-11

11

=120-67

=421-395

Financing:

         

Borrowings

=11+8

11

0

0

=19+11

Repayments (including interest) *

0

0

-3

-28

=-3-28

Total financing

=19+0

=11+0

=0-3

=0-28

=30-31

Cash balance, ending

=-11+19

=-3+11

=11-3

=53-28

=26-1

*Interest will total $1,000 for the year.