Tadeo Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | }
\hline & { \text { Apr } } & { \text { May } } &{ \text { Jun } } \
\hline \text { Cash collections } & \$ 42,000 & \$ 40,000 & \$ 45,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 6000 & 7000 & 5000 \
\hline \text { Operating expenses } & 7000 & 9000 & 7000 \
\hline \text { Capital expenditures } & 0 & 4600 & 4000 \
\hline
\end{array}$$ 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 May.
A) $62,400
B) $83,000
C) $56,000
D) $20,600

Question

Tadeo Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | } 
\hline &  { \text { Apr } } &  { \text { May } } &{ \text { Jun } } \
\hline \text { Cash collections } & \$ 42,000 & \$ 40,000 & \$ 45,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 6000 & 7000 & 5000 \
\hline \text { Operating expenses } & 7000 & 9000 & 7000 \
\hline \text { Capital expenditures } & 0 & 4600 & 4000 \
\hline
\end{array}$$ 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 May.
A) $62,400
B) $83,000
C) $56,000
D) $20,600

Quizplus · Accepted Answer

The cash balance at the end of May is calculated as follows: Starting balance on April 1 is $14,000. Add cash collections for April and May ($42,000 + $40,000 = $82,000). Subtract cash payments for April and May ($6,000 + $7,000 + $7,000 + $9,000 + $4,600 = $33,600). The projected cash balance at the end of May is $14,000 + $82,000 - $33,600 = $62,400.

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