Question

​Eudora, Inc. has a cash balance of

$ 20 comma 000$20,000

on April 1. The company is now preparing the cash budget for the second quarter. Budgeted cash collections and payments are as​ follows:

	Apr	May	Jun
Cash collections	$ 26 comma 000$26,000	$ 24 comma 000$24,000	$ 24 comma 000$24,000
Cash​ payments:
Purchases of direct materials	5 comma 3005,300	6 comma 0006,000	4 comma 6004,600
Operating expenses	3 comma 5003,500	6 comma 0006,000	5 comma 0005,000

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 June.

A.

$ 46 comma 000$46,000

B.

$ 37 comma 200$37,200

C.

$ 63 comma 600$63,600

D.

$ 49 comma 200

Answer 1

Correct answer---------------(C) $63,600

Working

	April	May	June
Beginning balance	$ 20,000.00	$ 37,200.00	$ 49,200.00
Cash collections	$ 26,000.00	$ 24,000.00	$ 24,000.00
Cash available	$ 46,000.00	$ 61,200.00	$ 73,200.00
Less:
Cash payment for direct material	$    5,300.00	$    6,000.00	$    4,600.00
Cash payment for operating expense	$    3,500.00	$    6,000.00	$    5,000.00
Total cash payments	$    8,800.00	$ 12,000.00	$    9,600.00
Ending Cash balance	$ 37,200.00	$ 49,200.00	$ 63,600.00