California Products Company has the following data as part of its budget for the 2 nd quarter:
$\begin{array}{|l|r|r|r|}
\hline & {\text { Apr }} &{\text { May }} &{\text { Jun }} \
\hline \text { Cash collections } & \$ 30,000 & \$ 32,000 & \$ 36,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of inventory } & 4,500 & 4,600 & 3,800 \
\hline \text { Operating expenses } & 7,200 & 7,600 & 8,000\
\hline \text { Capital expenditures } & 0 & 24,500 &5,200 \
\hline
\end{array}$
The cash balance at April 1 is forecast to be $8,200.
-Assume that there will be no financing transactions or costs during the quarter. Based on the above information only, what will the cash balance be at April 30?

Question

California Products Company has the following data as part of its budget for the 2 nd quarter:
$\begin{array}{|l|r|r|r|}
\hline & {\text { Apr }} &{\text { May }} &{\text { Jun }} \
\hline \text { Cash collections } & \$ 30,000 & \$ 32,000 & \$ 36,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of inventory } & 4,500 & 4,600 & 3,800 \
\hline \text { Operating expenses } & 7,200 & 7,600 &  8,000\
\hline \text { Capital expenditures } & 0 & 24,500 &5,200  \
\hline
\end{array}$ 
The cash balance at April 1 is forecast to be $8,200. 
-Assume that there will be no financing transactions or costs during the quarter. Based on the above information only, what will the cash balance be at April 30?

Quizplus · Accepted Answer

The cash balance at April 30 can be calculated by starting with the cash balance at April 1, adding cash collections for April, and subtracting cash payments for April. This gives: $8,200 (beginning balance) + $30,000 (collections) - $4,500 (inventory purchases) - $7,200 (operating expenses) = $26,500.

California Products Company Has the Following Data as Part of Its