Nyree Company is preparing its budget for the third quarter.The cash balance on June 30 was $34,000.Additional budgeted data are provided here: $$\begin{array} { | l | r | r | r | }
\hline & { \text { July } } & { \text { Aug } } & { \text { Sep } } \
\hline \text { Cash collections } & \$ 52,000 & \$ 52,000 & \$ 54,000 \
\hline \text { Cash payments } & & & \
\hline \text { Purchases of direct materials } & 19,000 & 18,000 & 19,000 \
\hline \text { Operating expenses } & 26,000 & 24,000 & 27,000 \
\hline \text { Capital expenditures } & 11,000 & 10,000 & 14,000 \
\hline
\end{array}$$ What amount should be shown in the cash budget for the cash balance at the end of July?
A) $22,000
B) $30,000
C) $108,000
D) $86,000

Question

Nyree Company is preparing its budget for the third quarter.The cash balance on June 30 was $34,000.Additional budgeted data are provided here: $$\begin{array} { | l | r | r | r | } 
\hline & { \text { July } } & { \text { Aug } } &  { \text { Sep } } \
\hline \text { Cash collections } & \$ 52,000 & \$ 52,000 & \$ 54,000 \
\hline \text { Cash payments } & & & \
\hline \text { Purchases of direct materials } & 19,000 & 18,000 & 19,000 \
\hline \text { Operating expenses } & 26,000 & 24,000 & 27,000 \
\hline \text { Capital expenditures } & 11,000 & 10,000 & 14,000 \
\hline
\end{array}$$ What amount should be shown in the cash budget for the cash balance at the end of July?
A) $22,000
B) $30,000
C) $108,000
D) $86,000

Quizplus · Accepted Answer

To calculate the cash balance at the end of July, we need to subtract the total cash disbursements and add the total cash receipts to the cash balance on June 30. Based on the provided data, the total cash disbursements in July are $94,000, and the total cash receipts are $90,000. Thus, the cash balance at the end of July can be calculated as follows:
Cash balance at June 30: $34,000
Total cash receipts in July: + $90,000
Total cash disbursements in July: - $94,000
Cash balance at the end of July: $30,000 (Option B)

Nyree Company Is Preparing Its Budget for the Third Quarter