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Question 3 Digital Solutions Inc is preparing its cash collection summary for 2018. Digital ended 2017...

Question 3

Digital Solutions Inc is preparing its cash collection summary for 2018. Digital ended 2017 with cash of

$81 million, and managers need to keep a cash balance of at least $75 million for operations.

Collections from customers are expected to total $11,284 million during 2018, and payments for the cost of services should reach $6,166 million. Operating expense payments are budgeted at $2,543.

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Answer #1

Answer:

Cash budget is the following:

Particulars Amount Amount
Cash balance (beginning) $ 81
Add :Cash receipts
Collection from customer $ 11,284
Total $ 81+ $ 11,284 = $ 11,365 $ 11,365
Less :Cash payments
cash services $ 6,166
Operating expense $ 2,543
Total $ 6,166 + $ 2,543=$ 8,709 $ 8,709
Excess or (deficiency) cash availabe $ 11,365 - $ 8,709= $ 2,658 $ 2,658
Borrrow $ 0
Repayment $ 0

Total cash balance

 $ 2,658
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