Question

Court Enterprises Inc. would like to prepare a summary cash budget for March. The following information is available:

Answer 1

Answer:

 $8,500

Explanation:

The computation of the cash balance at the end of March is shown below:

Opening Cash Balance            $3,000  

Add: Cash Collection from Sales    $53,500 (($50,000 × 65%) +($60,000 × 35%)

Total Cash Available          $56,500  

Less: Cash Payments    

Inventory         $19,000 (($20,000 × 50%) + ($18000 × 50%)

S&A Expense            $4,000  

Loan & Int Payment $25,000  

Depreciation                   -   (Non Cash Expense)

Closing Cash Balance            $8,500

We simply added the cash receipts and deduct the cash payments to the opening cash balance so that the ending cash balance could come