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 $5,000 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.)

Cash Budget	Quarter (000 omitted)
	1	2	3	4	Year
Cash balance, beginning	$9
Add collections from customers	65		107		367
Total cash available	74
Less disbursements:
Purchase of inventory	46	56		30
Selling and administrative expenses	27	32	30		109
Equipment purchases	9	9	21		49
Dividends	2	2	2	2
Total disbursements	84	99
Excess (deficiency) of cash available over disbursements	(10)		9
Financing:
Borrowings		7
Repayments (including interest) *				(19)
Total financing
Cash balance, ending
*Interest will total $1,000 for the year.

Answer 1

Cash Budget	Quarter (000 omitted)
	1	2	3	4	Year
Cash balance, beginning	$9	$5	$5	$5	$24
Add collections from customers	65	92	107	103	367
Total cash available	$74	97	$112	108	$391
Less disbursements:
Purchase of inventory	46	56	50	30	182
Selling and administrative expenses	27	32	30	20	109
Equipment purchases	9	9	21	10	49
Dividends	2	2	2	2	8
Total disbursements	84	99	103	62	348
Excess (deficiency) of cash available over disbursements	($10)	($2)	$9	46	$43
Financing:
Borrowings	15	7			22
Repayments (including interest) *			-4	-19	-23
Total financing	15	7	-4	-19	-1
Cash balance, ending	$5	$5	$5	27
*Interest will total $1,000 for the year.