Clyde,Inc.has a cash balance of $20,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: $$\begin{array} { | l | r | r | r | }
\hline & { \text { Apr } } & { \text { May } } & { \text { Jun } } \
\hline \text { Cash collections } & \$ 24,000 & \$ 24,000 & \$ 24,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 6000 & 5800 & 5000 \
\hline \text { Operating expenses } & 3500 & 5000 & 4600 \
\hline
\end{array}$$ There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of April.

Question

Clyde,Inc.has a cash balance of $20,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: $$\begin{array} { | l | r | r | r | } 
\hline & { \text { Apr } } & { \text { May } } & { \text { Jun } } \
\hline \text { Cash collections } & \$ 24,000 & \$ 24,000 & \$ 24,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 6000 & 5800 & 5000 \
\hline \text { Operating expenses } & 3500 & 5000 & 4600 \
\hline
\end{array}$$ There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of April.

Quizplus · Accepted Answer

The projected cash balance at the end of April is calculated as follows: Starting cash balance + Cash collections - Cash payments. For April, this is $20,000 + $24,000 - ($6,000 + $3,500) = $34,500.

Clyde,IncHas a Cash Balance of $20,000 on April 1 There Are No Budgeted Capital Expenditures or Financing Transactions During