Question

Marsha Inc. has the following budgeted data for the coming year:

Cash balance, beginning	$ 15,000
Collections from customers	145,000
Direct materials purchases	25,000
Expenses:
Operating expenses	50,000
Payroll	75,000
Income taxes	6,000
Other:
Machinery purchases	30,000

Operating expenses include $20,000 depreciation for buildings and equipment. All purchases of materials are paid for in the period of purchase. The company requires a minimum cash balance of $25,000.

Compute the amount the company needs to finance or the excess cash available for Marsha to invest. (Cash outflows and shortages should be indicated with a minus sign.)

Marsha Inc. has the following budgeted data for the coming year: Cash balance, beginning $ 15,000 Collections from customers 145,000 Direct materials purchases 25,000 Expenses: Operating expenses 50,000 Payroll 75,000 Income taxes 6,000 Other: Machinery purchases 30,000 Operating expenses include $20,000 depreciation for buildings and equipment. All purchases of materials are paid for in the period of purchase. The company requires a minimum cash balance of $25,000. Compute the amount the company needs to finance or the excess cash available for Marsha to invest. (Cash outflows and shortages should be indicated with a minus sign.)

Answer 1

Computation the amount the company needs to finance or the excess cash available for Marsha to invest.
Cash balance , beginning	$15,000.00
Add : Cash Receipts
- Collection from Customers	$145,000.00
Total Cash Available	$160,000.00
Less : Cash Payments
- Cash Operating Expenses	$30,000.00
- Direct material Purchases	$25,000.00
- Payroll	$75,000.00
- Income Taxes	$6,000.00
- Machinery Purchases	$30,000.00
Total Cash Payments	$166,000.00
Cash surplus (deficit)	-$6,000.00
Minimum Cash balance required	$25,000.00
Company needs to finance	$31,000.00