Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400. Cash receipts are expected to be $641,000 and cash payments for purchases are expected to be $608,500. Other cash expenses expected are $27,000 selling and $33,500 general and administrative. The company desires a minimum cash balance at the end of each month of $30,000. If necessary, the company borrows enough cash to meet the minimum using a short-term note.
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Webster's preliminary cash balance before loan activity for April is expected to be:

Question

Quizplus · Accepted Answer

The preliminary cash balance is calculated as: Beginning balance ($36,400) + Cash receipts ($641,000) - Cash payments ($608,500) - Selling expenses ($27,000) - General and administrative expenses ($33,500) = $8,400.

Webster Corporation Is Preparing Its Cash Budget for April