Question

In June, Erie Plastics had an ending cash balance of $55,000. In July, the firm had total cash receipts of $70,000 and total cash disbursements of $10,000. The minimum cash balance required by the firm is $25,000. At the end of July, Erie Plastics hada. an excess cash balance of $90,000b. an excess cash balance of $0c. an excess cash balance of $115,000d. required financing of $25,000 e. none of the above

Answer 1

a. an excess cash balance of $90,000

Step-by-step explanation:

The cash at end of July = Cash of $55,000 at end of June + cash receipts of $70,000 - cash disbursements of $10,000 = $115,000

Cash excess = Actual cash ending - minimum cash balance required = $115,000 - $25,000 = $90,000