Nobell Ltd has a cash balance of $22,000 on 1 April 2017.It is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows:
$\begin{array}{|l|l|l|l|}
\hline& \text { Apr } & \text { May } & \text { Jun } \
\hline \text { Cash collections } & \$ 20,000 & \$ 22,000 & \$ 25,000 \
\hline \text { Cash payments } & & &\
\hline \text { Purchases of inventory } & 5300 & 5800 & 4000 \
\hline \text { Operating expenses } & 6000 & 3500 & 6000\
\hline
\end{array}$

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

Nobell Ltd has a cash balance of $22,000 on 1 April 2017.It is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows:
$\begin{array}{|l|l|l|l|} 
\hline& \text { Apr } & \text { May } & \text { Jun } \
\hline \text { Cash collections } & \$ 20,000 & \$ 22,000 & \$ 25,000 \
\hline \text { Cash payments } & & &\
\hline \text { Purchases of inventory } & 5300 & 5800 & 4000 \
\hline \text { Operating expenses } & 6000 & 3500 & 6000\
\hline
\end{array}$

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 $30,700. This is calculated by adding the beginning cash balance of $22,000 to the budgeted cash collections for April of $20,000 and then subtracting the budgeted cash payments for April of $11,300.

Nobell Ltd Has a Cash Balance of $22,000 on 1