Question

Bookworm Publishers publishes books and they have gathered the following data for the month of​ October: Data Cash on​ 8/1 $ 7 comma 000 Expected Cash Collections $ 350 comma 000 Direct Materials Cash Disbursements $ 69 comma 000 Direct Labor Cash Disbursements $ 46 comma 000 MOH Cash Disbursements $ 39 comma 000 Operating Expenses Cash Disbursements $ 89 comma 000 Capital Expenditures Cash Disbursements $ 128 comma 000 Bookworm Publishers requires an ending cash balance of at least​ $5,000 and can borrow from a line of credit in​ $1,000 increments. What is the excess or deficiency of cash for​ October?

Answer 1

-$14,000

Step-by-step explanation:

The computation of excess or deficiency of cash is shown below:

= Beginning cash balance + expected cash receipts - expected cash disbursements

where,

Expected cash disbursements equal to

= Direct Materials Cash Disbursements + Direct Labor Cash Disbursements + MOH Cash Disbursements + Operating Expenses Cash Disbursements + Capital Expenditures Cash Disbursements

= $69,000 + $46,000 + $39,000 + $89,000 + $128,000

= $371,000

And, the other items values would remain the same

Now put these values to the above formula

So, the value would equal to

= $7,000 + $350,000 - $371,000

= $357,000 - $371,000

= -$14,000