Zygot Biotech Company is budgeting for the 3rd quarter, and provides the following data:
$\begin{array}{|l|r|r|r|}
\hline& \text { Jul } & \text { Aug } & \text { Sep } \
\hline \text { Cash collections } & \$ 50,000 & \$ 40,000 & \$ 48,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of inventory } & 31,000 & 22,000 & 18,000 \
\hline \text { Operating expenses } & 12,000 & 9,000 & 11,600 \
\hline \text { Capital expenditures } & 0 & 19,000 & 0 \
\hline
\end{array}$

The cash balance at June 30 is projected to be $5,600. There are no financing transactions planned in the 3rd quarter.
- What is the projected cash balance at the end of July?

Question

Zygot Biotech Company is budgeting for the 3rd quarter, and provides the following data:
$\begin{array}{|l|r|r|r|}
\hline& \text { Jul } & \text { Aug } & \text { Sep } \
\hline \text { Cash collections } & \$ 50,000 & \$ 40,000 & \$ 48,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of inventory } & 31,000 & 22,000 & 18,000 \
\hline \text { Operating expenses } & 12,000 & 9,000 & 11,600 \
\hline \text { Capital expenditures } & 0 & 19,000 & 0 \
\hline
\end{array}$

The cash balance at June 30 is projected to be $5,600. There are no financing transactions planned in the 3rd quarter.
- What is the projected cash balance at the end of July?

Quizplus · Accepted Answer

The projected cash balance at the end of July is calculated by taking the beginning cash balance of $5,600, adding the cash collections of $50,000, and subtracting the cash payments for purchases of inventory ($31,000) and operating expenses ($12,000). This results in a cash balance of $12,600.

Zygot Biotech Company Is Budgeting for the 3rd Quarter, and Provides