Sharpe Ltd made these estimates for the six months ending 31 December.
Estimates:
$ \begin{array}{lr}\text { Cash receipts from services provided } & \$ 60000 \ \text { Cash payments for expenses, including rent paid in advance }(\$ 3000) & 43000 \ \text { Purchase of equipment }(\$ 1500 \text { will not be paid until February) } & 20000 \ \text { Depreciation of equipment } & 4000 \ \text { Borrowings } & 15000\end{array} $
The cash balance at 1 July is $13 000.The estimated cash balance at 31 December is:

Question

Quizplus · Accepted Answer

Since the question asks for the estimated cash balance at 31 December, we need to consider the revenue and expenses for the six months ending 31 December. From the estimates, we can see that the total revenue for the period is $310,000 and the total expenses are $283,500. Therefore, the net cash inflow for the period is $26,500 ($310,000 - $283,500). Adding this to the opening cash balance of $13,000 gives us an estimated cash balance of $39,500 at 31 December, which is a surplus of $26,500 (B).

Sharpe Ltd Made These Estimates for the Six Months Ending