Lyon Corp.has provided a part of its budget for the second quarter: $\begin{array}{|l|r|r|r|}
\hline&{\text { Apr }} &{\text { May }} &{\text { Jun }} \
\hline \text { Cash collections } & \$ 40,000 & \$ 43,000 & \$ 50,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 7200 & 7200 & 6000 \
\hline \text { Operating expenses } & 7000 & 9000 & 7000 \
\hline \text { Capital expenditures } & 5000 & 0 & 0 \
\hline
\end{array}$ The cash balance on April 1 is $12,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of June.

Question

Lyon Corp.has provided a part of its budget for the second quarter: $\begin{array}{|l|r|r|r|} 
\hline&{\text { Apr }} &{\text { May }} &{\text { Jun }} \
\hline \text { Cash collections } & \$ 40,000 & \$ 43,000 & \$ 50,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 7200 & 7200 & 6000 \
\hline \text { Operating expenses } & 7000 & 9000 & 7000 \
\hline \text { Capital expenditures } & 5000 & 0 & 0 \
\hline
\end{array}$ The cash balance on April 1 is $12,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of June.

Quizplus · Accepted Answer

The projected cash balance at the end of June is calculated by adding the beginning cash balance and cash collections, then subtracting cash payments for each month. Starting with $12,000, add collections ($40,000 + $43,000 + $50,000) and subtract payments ($7,200 + $7,200 + $6,000 for materials, $7,000 + $9,000 + $7,000 for expenses, and $5,000 for capital expenditures in April). The calculation is $12,000 + $133,000 - $48,400 = $96,600.

Lyon CorpHas Provided a Part of Its Budget for the Second