Diemans Corp. has provided a part of its budget for the 2 nd quarter: $$\begin{array} { | l | r | r | r | }
\hline & { \text { Apr } } & { \text { May } } & { \text { June } } \
\hline \text { Cash collections } & \$ 40,000 & \$ 45,000 & \$ 52,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of inventory } & 4,500 & 7,200 & 4,500 \
\hline \text { Operating expenses } & 7,900 & 5,600 & 9,000 \
\hline \text { Capital expenditures } & 0 & 20,000 & 4,600 \
\hline
\end{array}$$
-Refer to the table above,The cash balance on April 1 is $12,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the cash balance at the end of May.

Question

Diemans Corp. has provided a part of its budget for the 2 nd quarter: $$\begin{array} { | l | r | r | r | } 
\hline &  { \text { Apr } } & { \text { May } } &  { \text { June } } \
\hline \text { Cash collections } & \$ 40,000 & \$ 45,000 & \$ 52,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of inventory } & 4,500 & 7,200 & 4,500 \
\hline \text { Operating expenses } & 7,900 & 5,600 & 9,000 \
\hline \text { Capital expenditures } & 0 & 20,000 & 4,600 \
\hline
\end{array}$$
-Refer to the table above,The cash balance on April 1 is $12,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the cash balance at the end of May.

Quizplus · Accepted Answer

The cash balance at the end of May is $51,800. This is calculated by adding the cash collections for April and May ($40,000 + $45,000 = $85,000) and subtracting the cash payments for April and May ($4,500 + $7,200 + $7,900 + $5,600 = $25,200). The result is $59,800. Adding the beginning cash balance of $12,000 gives a total of $51,800.

Diemans Corp -Refer to the Table Above,The Cash Balance on April 1