A firm is pareparing a summary cash budget for the first quarter of 2016. The fo
ID: 2452799 • Letter: A
Question
A firm is pareparing a summary cash budget for the first quarter of 2016. The following information regarding operating activities from the cash receipts and cash disbursements budgets are available:
January
February
March
$15,000
$23,000
$34,000
13,000
26,000
30,000
The following information is also available:
What is the cash balance at the end of March expected to be?
A. $6,000
B. $ 2,000
C. $ 1,000
D. $ 3,000
January
February
March
Cash receipts$15,000
$23,000
$34,000
Cash disbursements13,000
26,000
30,000
Explanation / Answer
Cash balance at the end of march is $6000.
Computation of Cash budget
Particulars Januaury February March
Opening balance 10000 12000 8000
add: cash receipts 15000 23000 34000
less: cash disbursements (13000) (26000) (30000)
payments (1000) (1000)
other payments (5000)
Ending balance 12000 8000 6000.
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