Question

Abc company has a cash balance of 35,000 on august 1 and requires a minimum ending cash balance of 26,080. cash receipts from sales budgeted for august are 234,080. cash disbursements budgeted for august include inventory purchases, 27,000; other manufacturing expenses, 90,000; operating expenses, 41,000; bond retirements, 60,000; and dividend payments, 25,000. What is the net cash flow for the month of August?

1) 185,080
2) 159,080
3) 149,080
4) 125,080

Answer 1

The net cash flow for the month of August is $26,080. None of the given options is answer.

Step-by-step explanation:

Cash Balance:

Starting cash balance on August 1st is $35,000.

Cash Receipts:

Budgeted cash receipts from sales for August are $234,080.

Total Cash Available:

Add the starting balance and receipts: $35,000 + $234,080 = $269,080.

Cash Disbursements:

Inventory purchases: $27,000.

Other manufacturing expenses: $90,000.

Operating expenses: $41,000.

Bond retirements: $60,000.

Dividend payments: $25,000.

Total cash disbursements: $243,000.

Net Cash Flow:

Subtract total disbursements from total available cash: $269,080 - $243,000 = $26,080.

Therefore, the net cash flow for the month of August is $26,080.

None of the given options is answer.