A company has the following excess (deficiency) of cash receipts over cash disbursements projected for the next year on a quarterly basis. It will not have any cash at the start of the year. The quarterly interest rte is 2%, and any borrowing and repayment of principal must be in round $1,000 amounts. There is no cash reserve requirement Assume loan related payments are made when excess cash is available.

Quarter

1 2 3 4 Year

Excess (deficiency) of cash available for disbursements ($121,140) ($41,680) $177,680 $2,160 $17,020

Required:

Do a cash budget by quarter for the year. What is the ending cash balance in the fourth quarter if interest is accrued until the end of the fourth quarter and paid at that time along with the total principal borrowed?

Please provide detail calculations of how you got the 'Cash Balance, Beginning'. Thank you.

Answer rating: 100% (QA)

To create a cash budget by quarter for the year we need to calculate the beginning cash balance cash receipts cash disbursements net cash flow and end... View the full answer