Diemans Corp has provided a part of its budget for the second quarter
Apr May Jun
Cash collections $40,000 $40,000 $52,000
Cash payments:
Purchases of direct materials 4,500 5,000 7,000
Operating expenses 7,200 7,000 4,500
Capital expenditures 5,000 0 10,000
The cash balance on April 1 is $14,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the projected cash balance at the end of April.
A) $95,800
B) $54,000
C) $37,300
D) $65,300
C .C)
Apr May Jun
Beginning cash balance $14,000 $37,300 $65,300
Plus: Receipts from customers 40,000 40,000 52,000
Total cash available $54,000 $77,300 $117,300
Less: Payment for purchases of direct materials 4,500 5,000 7,000
Operating expenses 7,200 7,000 4,500
Capital expenditures 5,000 0 10,000
Ending cash balance $37,300 $65,300 $95,800
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