Duffy Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | }
\hline & { \text { Apr } } &{ \text { May } } &{ \text { Jun } } \
\hline \text { Cash collections } & \$ 40,000 & \$ 40,000 & \$ 52,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 4500 & 5000 & 7000 \
\hline \text { Operating expenses } & 7200 & 7000 & 4500 \
\hline \text { Capital expenditures } & 5000 & 0 & 10,000 \
\hline
\end{array}$$ 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

Question

Duffy Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | } 
\hline & { \text { Apr } } &{ \text { May } } &{ \text { Jun } } \
\hline \text { Cash collections } & \$ 40,000 & \$ 40,000 & \$ 52,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 4500 & 5000 & 7000 \
\hline \text { Operating expenses } & 7200 & 7000 & 4500 \
\hline \text { Capital expenditures } & 5000 & 0 & 10,000 \
\hline
\end{array}$$ 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

Quizplus · Accepted Answer

The projected cash balance at the end of April is calculated as follows: Starting cash balance ($14,000) + Cash collections ($40,000) - Cash payments (Purchases of direct materials $4,500 + Operating expenses $7,200 + Capital expenditures $5,000) = $37,300.

Duffy Corp The Cash Balance on April 1 Is $14,000