Question

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $7,000 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.)

	Quarter (000 omitted)
	1	2	3	4	Year
Cash balance, beginning	$7
Add collections from customers			105		378
Total cash available	91
Less disbursements:
Purchase of inventory	44	54		28
Selling and administrative expenses		32	30		124
Equipment purchases	8	8	19		45
Dividends	2	2	2	2
Total disbursements		96
Excess (deficiency) of cash available over disbursements	(2)		12
Financing:
Borrowings		8
Repayments (including interest) *				(13)
Total financing
Cash balance, ending
*Interest will total $1,000 for the year.

Answer 1

Quarter (000 omitted)
	1	2	3	4	Year
Cash balance, beginning	$7	7	7	7	7
Add collections from customers	84	88	105	101	378
Total cash available	91	95	112	108	385
Less disbursements:
Purchase of inventory	44	54	49	28	175
Selling and administrative expenses	39	32	30	23	124
Equipment purchases	8	8	19	10	45
Dividends	2	2	2	2	8
Total disbursements	93	96	100	63	352
Excess (deficiency) of cash available over disbursements	(2)	(1)	12	45	33
Financing:
Borrowings	9	8	-	-	17
Repayments (including interest) *	-	-	(5)	(13)	(18)
Total financing	9	8	(5)	(13)	(1)
Cash balance, ending	7	7	7	32	32
***Interest will total $1,000 for the year.