Jager Corp. has prepared a preliminary cash budget for the third quarter as shown below: $$\begin{array} { | l | r | r | r | }
\hline \text { Cash Budget } & { \text { Jul } } & { \text { Aug } } &{ \text { Sep } } \
\hline \text { Beginning cash balance } & \$ 32,000 & \$ 5400 & \$ 11,400 \
\hline \text { Plus: Cash collections } & \$ 49,400 & \$ 53,000 & \underline { 47,600 } \
\hline \text { Cash available } & 81,400 & \$ 58,400 & \$ 59,000 \
\hline \text { Less: Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 36,000 & 8000 & 11,000 \
\hline \text { Operating expenses } & 39,000 & 30,000 & 30,900 \
\hline \text { Capital expenditures } & \underline { 1000 } & \underline { 9000 } & \underline { 7 4 0 0 } \
\hline \text { Ending cash balance } & \$ 5400 & \$ 11,400 & \$ 9700 \
\hline
\end{array}$$ Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $57,000 in July, $56,000 in August, and $42,000 in September. Based on the new data, calculate the new projected cash balance at the end of September.

Question

Jager Corp. has prepared a preliminary cash budget for the third quarter as shown below: $$\begin{array} { | l | r | r | r | } 
\hline \text { Cash Budget } &  { \text { Jul } } &  { \text { Aug } } &{ \text { Sep } } \
\hline \text { Beginning cash balance } & \$ 32,000 & \$ 5400 & \$ 11,400 \
\hline \text { Plus: Cash collections } & \$ 49,400 & \$ 53,000 & \underline { 47,600 } \
\hline \text { Cash available } & 81,400 & \$ 58,400 & \$ 59,000 \
\hline \text { Less: Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 36,000 & 8000 & 11,000 \
\hline \text { Operating expenses } & 39,000 & 30,000 & 30,900 \
\hline \text { Capital expenditures } & \underline { 1000 } & \underline { 9000 } & \underline { 7 4 0 0 } \
\hline \text { Ending cash balance } & \$ 5400 & \$ 11,400 & \$ 9700 \
\hline
\end{array}$$ Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $57,000 in July, $56,000 in August, and $42,000 in September. Based on the new data, calculate the new projected cash balance at the end of September.

Quizplus · Accepted Answer

To calculate the updated projected cash balance at the end of September, we need to subtract the total disbursements and add the revised cash collections for each month (July, August, and September) from the beginning cash balance of $18,000. The calculation is as follows:

Beginning Cash Balance (July 1) = $18,000
July cash collections = $57,000
July disbursements = $37,000
July ending cash balance = $38,000 ($18,000 + $57,000 - $37,000)

August cash collections = $56,000
August disbursements = $34,000
August ending cash balance = $60,000 ($38,000 + $56,000 - $34,000)

September cash collections = $42,000
September disbursements = $45,000
September ending cash balance = $57,000 ($60,000 + $42,000 - $45,000)

Therefore, the new projected cash balance at the end of September is $57,000, which is option D.

Jager Corp Subsequently, the Marketing Department Revised Its Figures for Cash Collections