Answer:
Garden Depot
Cash Budget for the upcoming fiscal year:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Beginning cash balance $20,000 $10,000 $37,900 $27,900
Total cash receipts $180,000 $330,000 $210,000 $230,000
Total cash
disbursements $260,000 $230,000 $220,000 $240,000
Bank Loan/Repayment $70,000 ($72,100)
Minimum cash balance $10,000 $37,900 $27,900 $17,900
Explanation:
A cash budget is a forecast of the cash receipts and cash disbursements for a future period of time. It is an important financial management tool that helps management to decide when to borrow cash to meet shortages and when to invest excess cash to generate income. By its preparation, management is prepared to avoid liquidity problems which can ruin a business.