Nyree Company is preparing its budget for the third quarter. The cash balance on June 30 was $32,000. Additional budgeted data are provided here: $$\begin{array} { | l | r | r | r | }
\hline & { \text { July } } & { \text { Aug } } & { \text { Sep } } \
\hline \text { Cash collections } & \$ 53,000 & \$ 51,000 & \$ 56,000 \
\hline \text { Cash payments } & & & \
\hline \text { Purchases of direct materials } & 20,000 & 20,000 & 20,000 \
\hline \text { Operating expenses } & 32,000 & 20,000 & 23,000 \
\hline \text { Capital expenditures } & 16,000 & 7000 & 9000 \
\hline
\end{array}$$ What amount should be shown in the cash budget for the cash balance at the end of July?

Question

Nyree Company is preparing its budget for the third quarter. The cash balance on June 30 was $32,000. Additional budgeted data are provided here: $$\begin{array} { | l | r | r | r | } 
\hline & { \text { July } } & { \text { Aug } } & { \text { Sep } } \
\hline \text { Cash collections } & \$ 53,000 & \$ 51,000 & \$ 56,000 \
\hline \text { Cash payments } & & & \
\hline \text { Purchases of direct materials } & 20,000 & 20,000 & 20,000 \
\hline \text { Operating expenses } & 32,000 & 20,000 & 23,000 \
\hline \text { Capital expenditures } & 16,000 & 7000 & 9000 \
\hline
\end{array}$$ What amount should be shown in the cash budget for the cash balance at the end of July?

Quizplus · Accepted Answer

The cash balance at the end of July is calculated as the beginning balance ($32,000) plus cash collections ($53,000) minus cash payments (purchases of direct materials $20,000, operating expenses $32,000, and capital expenditures $16,000), resulting in $17,000.

Nyree Company Is Preparing Its Budget for the Third Quarter