Pearson Advising will have cash receipts of $35,000 in April and cash disbursements of $30,000 for this month. If its beginning cash is $5,000 and its desired reserve is $2,000, what will its excess be for April?
A) There is no excess but a shortfall.
B) $5,000
C) $7,000
D) $8,000
Answer: D
Explanation: D) Its net cash flow for the month is cash receipts minus cash disbursements = $35,000 - $30,000 = $5,000. Its ending cash is net cash flow plus beginning cash = $5,000 + $5,000 = $10,000. Its excess is ending cash minus reserves = $10,000 - $2,000 = $8,000.
You might also like to view...
If a magazine ad costs $500,000, total readership is 20,000,000, but only 2,000,000 fit the advertiser's target profile, the weighted (or demographic) cost per thousand (CPM) would be:
A) $25 B) $250 C) $2,500 D) $10
A(n) ________ is an agreement in which the accused admits to a lesser crime than charged, and in return, the government agrees to impose a lesser sentence than might have been obtained had the case gone to trial
A) plea bargain B) indictment C) arraignment D) nolo contendere