Question

A company is preparing its cash budget for the coming month. All sales are on account. Given the following: Beginning Balances Budget Amounts Cash $ 50,000 Accounts Receivable 180,000 Sales $ 800,000 Cash disbursements 780,000 Depreciation 25,000 Ending accounts receivable balance 210,000 What is the expected cash balance of the company at the end of the coming month

Answer 1

$40,000

Step-by-step explanation:

The calculation of cash balance is shown below:-

For computing the ending cash balance first we will compute the total cash inflow which is here below:-

Total cash inflow = Opening cash receivable + Sales - Ending cash receivable

= $180,000 + $800,000 - $210,000

= $980,000 - $210,000

= $770,000

Ending cash balance = Opening cash balance + Total cash inflow - Cash disbursement

= $50,000 + $770,000 - $780,000

= $40,000