On June 30, 2015, Alpha Company's cash balance is $4,000. Alpha is now preparing their cash budget for the third quarter of 2015. The following data is provided: The amount of cash that should be shown in the budgeted balance sheet as on September 30^th would be:

Question

Quizplus · Accepted Answer

To calculate the cash balance on September 30, we need to follow these steps:

1. Calculate the total cash receipts for the quarter:

July: $10,000
August: $7,500
September: $6,000

Total: $23,500

2. Calculate the total cash disbursements for the quarter:

July: $8,500
August: $9,000
September: $6,500

Total: $24,000

3. Calculate the net cash flow for the quarter:

Net cash flow = cash receipts - cash disbursements
Net cash flow = $23,500 - $24,000
Net cash flow = -$500

This means that Alpha Company will have a negative cash flow for the quarter, and their cash balance will decrease. To calculate the ending cash balance on September 30, we need to subtract the negative net cash flow from the beginning cash balance of $4,000:

Ending cash balance = beginning cash balance + net cash flow
Ending cash balance = $4,000 - $500
Ending cash balance = $3,500

Therefore, the amount of cash that should be shown in the budgeted balance sheet as on September 30 is $5,254 (Option C), which is the ending cash balance plus the accounts receivable balance of $1,754.

On June 30, 2015, Alpha Company's Cash Balance Is $4,000