How would I prepare a budget for an upcoming fiscal year?
The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. Interest in this case is not compounded.
Total Cash Receipts: 1st quarter: $180,000 2nd quarter: $330,000 3rd quarter $210,000 4th quarter $230,000
Total Cash disbursements: $260,000 $230,000 $220,000 $240,000