Question

Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.

a. Beginning cash balance on June 1, $26,000.
b. Cash receipts from sales, $264,000.
c. Budgeted cash disbursements for purchases, $138,000.
d. Budgeted cash disbursements for salaries, $80,000.
e. Other budgeted expenses, $15,000.
f. Cash repayment of bank loan, $10,000.
g. Budgeted depreciation expense, $25,000.

Answer 1

$47,000

Step-by-step explanation:

The cash budget is a forecast of the company's expected movement in cash considering the expected outflows and inflows. This movements result in a change between the opening and ending cash balance. This may be expressed mathematically as

Opening balance + Cash receipts - Cash disbursed = ending balance

Cash receipts for the period

= $264,000

Cash disbursed

= $138,000 + $80,000 + $10,000 + $15,000

= $243,000

ending balance = $26,000 + $264,000 - $243,000

= $47,000