T.Bailey Pty Ltd is planning to purchase equipment costing $45 000.The planned delivery date is 11 April with settlement on that date.On 17 January,T.Bailey Pty Ltd paid a deposit of $15 000.The amount that will appear in the cash budget for the quarter ending 31 March is:

Question

Quizplus · Accepted Answer

The cash budget only includes cash inflows and outflows within the specific time period being budgeted. As the deposit was made on 17 January, it would have already been included in the previous cash budget. Therefore, the only cash outflow related to this equipment that would appear in the cash budget for the quarter ending 31 March is the remaining $30 000 due upon settlement. Thus, the correct answer is option C) outflow of $15 000.

TBailey Pty Ltd Is Planning to Purchase Equipment Costing $45