Question

Diemans Corp. has provided a part of its budget for the 2nd​ quarter: Apr May Jun Cash collections $ 40 comma 000 $ 42 comma 000 $ 42 comma 000 Cash payments Purchases of inventory 4 comma 500 7 comma 000 7 comma 200 Operating expenses 7 comma 200 9 comma 000 6 comma 000 Capital expenditures 4 comma 600 20 comma 000 0 The cash balance on April 1 is $ 14 comma 000. Assume that there will be no financing transactions or costs during the quarter. Calculate the cash balance at the end of April.

Answer 1

$37,700

Step-by-step explanation:

Given that,

Cash balance on April 1 = $14,000

Cash collections during April = $40,000

Cash payments during April:

Purchases of inventory = $4,500

Operating expenses = $7,200

Capital expenditures = $4,600

All the cash payments such as purchases of inventory, operating expenses and capital expenditure are deducted and cash collections & opening cash balance are added.

Cash balance at the end of April:

= Opening cash balance + Cash collections - Cash payments

= $14,000 + $40,000 - ($4,500 + $7,200 + $4,600)

= $54,000 - $16,300

= $37,700