Felton Manufacturing provides the following data excerpted from its 3rd quarter budget: The cash balance at June 30 is projected to be $4,000. Based on the above data, how much cash shortfall is the company projected to have at the end of August?

Question

Felton Manufacturing provides the following data excerpted from its 3rd quarter budget:  The cash balance at June 30 is projected to be $4,000. Based on the above data, how much cash shortfall is the company projected to have at the end of August?

Quizplus · Accepted Answer

To calculate the projected cash balance at the end of August, we need to subtract total cash disbursements in July and August from total cash receipts in July and August. 
Total cash receipts in July and August: $160,000 + $170,000 = $330,000 
Total cash disbursements in July and August: $150,000 + $150,000 + $60,000 + $20,000 = $380,000 
Projected cash balance at the end of August: $4,000 + $330,000 - $380,000 = -$46,000 
The company is projected to have a cash shortfall of $5,000 ($46,000 - $41,000) at the end of August. Therefore, the best choice is C.

Felton Manufacturing Provides the Following Data Excerpted from Its 3rd