Question

The bank balance was $1,234,567 on January 31. In February, we received $825k on paid invoices, and had $198k in cost of sales, $356k in overhead, and $92k in other expenses. In March, we expect cash revenue to grow by 12% and all expenses to grow by 9%. What do you project the bank balance to be on April 1?

Answer 1

April Beginning Balance $ 1,633,427

Explanation:

The closing balance of January is the opening balance of February

February,

Opening Balance $1,234,567

Add Payment received on invoices $825k

Less Cost of sales $198k,

Less Overheads $356k ,

Less Other Expenses $92k .

February Ending Balance $ 1,413, 567

March

Beginning Balance $ 1,413, 567

Add Payment received on invoices $825k *1.12= 924 k

Less Cost of sales $198k *1.09= 215.82k

Less Overheads $356k *1.09= 388.04k

Less Other Expenses $92k *1.09= 100.28k

March Ending Balance = $ 1,633,427

April Beginning Balance $ 1,633,427

Treating the Costs of Sales, Overheads and the other expenses as the expenses paid out of the Bank Balance meaning no accounts payable or other cash paid.