Chatelain Company is preparing its budget for the third quarter. The cash balanc
ID: 2416357 • Letter: C
Question
Chatelain Company is preparing its budget for the third quarter. The cash balance on June 30 was $ 30 comma 000$30,000. Additional budgeted data are provided here:
Jul Aug Sep Cash
cash collections $ 51 comma 000$51,000 $ 50 comma 000$50,000 $ 51 comma 000$51,000
Cash payments Purchases of direct materials 24 comma 00024,000 20 comma 00020,000 18 comma 00018,
Operating expenses 23 comma 00023,000 22 comma 00022,000 24 comma 00024,000
Capital expenditures 15 comma 00015,000 5 comma 0005,000 7 comma 0007,000
What amount should be shown in the cash budget for the cash balance at the end of July?
A.
$ 32 comma 000$32,000
B.
$ 113 comma 000$113,000
C.
$ 81 comma 000$81,000
D.
$ 19 comma 000$19,000
Explanation / Answer
Cash Budget for the Third Quarter
Particulars
July
August
September
Cash Collections
$ 51,000
$ 50,000
$ 51,000
Cash Payments
Purchase of Direct Materials
$ (24,000)
$ (20,000)
$ (18,000)
Operating expenses
$ (23,000)
$ (22,000)
$ (24,000)
Capital Expenses
$ (15,000)
$ (5,000)
$ (7,000)
Total Cash Payments
$ (62,000)
$ (47,000)
$ (49,000)
Net Cash Inflow
$ (11,000)
$ 3,000
$ 2,000
Opening Cash Balance
$ 30,000
$ 19,000
$ 22,000
Closing Cash Balance
$ 19,000
$ 22,000
$ 24,000
Answer D = 19000
Cash Budget for the Third Quarter
Particulars
July
August
September
Cash Collections
$ 51,000
$ 50,000
$ 51,000
Cash Payments
Purchase of Direct Materials
$ (24,000)
$ (20,000)
$ (18,000)
Operating expenses
$ (23,000)
$ (22,000)
$ (24,000)
Capital Expenses
$ (15,000)
$ (5,000)
$ (7,000)
Total Cash Payments
$ (62,000)
$ (47,000)
$ (49,000)
Net Cash Inflow
$ (11,000)
$ 3,000
$ 2,000
Opening Cash Balance
$ 30,000
$ 19,000
$ 22,000
Closing Cash Balance
$ 19,000
$ 22,000
$ 24,000
Answer D = 19000