Question
On June 30, Alpha Company's cash balance is $4,000. Alpha is now preparing their cash budget for the third quarter of the year. The following
On June 30, Alpha Company's cash balance is $4,000. Alpha is now preparing their cash budget for the third quarter of the year. The following data is provided:
Cash budget | July | Aug | Sep |
Beginning cash balance | $4,000 | $8,000 | $6,958 |
Plus: Cash collections | 50,000 | 40,000 | 49,000 |
Cash available | $54,000 | $48,000 | $55,958 |
Less: Cash payments | |||
Purchases of direct materials | 31,000 | 22,000 | 17,100 |
Operating expenses | 12,000 | 9,000 | 11,000 |
Capital expenditures | 13,000 | 25,000 | 0 |
Interest expense at 5% | 0 | 42 | 104 |
Less: Total cash payments | $56,000 | $56,042 | $28,204 |
Ending cash balance before financing | $(2,000) | $(8,042) | $27,754 |
Minimum cash balance desired | (5,000) | (5,000) | (5,000) |
Cash excess/(deficiency) | $(7,000) | $(13,042) | $22,754 |
Financing | |||
Borrowing at end of month | 10,000 | 15,000 | |
Principal repayments at end of month | $(20,000) | ||
Total effects of financing | 10,000 | 15,000 | (20,000) |
Ending cash balance | $8,000 | $6,958 | $7,754 |
The amount of cash that should be shown in the budgeted balance sheet as of September 30 would be ________.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started