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 would be ________.

Question

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 would be ________.

Quizplus · Accepted Answer

The cash budget formula is: Beginning cash balance + cash receipts - cash disbursements = ending cash balance.

Based on the given data, cash receipts for 3rd quarter are $75,000 and cash disbursements are $70,746. Therefore, the cash balance on September 30 can be calculated as follows:

Beginning cash balance (June 30) = $4,000
Cash receipts = $75,000
Cash disbursements = $70,746
Ending cash balance = Beginning cash balance + cash receipts - cash disbursements
Ending cash balance = $4,000 + $75,000 - $70,746
Ending cash balance = $8,254

Therefore, the correct answer is option C ($5,254).

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