Question

Webster corporation is preparing its cash budget for april. the march 31 cash balance is $36,700. cash receipts are expected to be $644,000 and cash payments for purchases are expected to be $611,500. other cash expenses expected are $27,300 selling and $33,800 general and administrative. the company desires a minimum cash balance at the end of each month of $33,000. if necessary, the company borrows enough cash to meet the minimum cash balance using a short-term note. webster's preliminary cash balance before loan activity for april is expected to be:

Answer 1

Calculation of Webster’s preliminary cash balance before loan activity for April:

Beginning Cash balance $36,700

Add: Expected Cash receipts $644,000

Less: Expected Cash Payments for Purchases $611,500

Less: Cash Payment for Selling Expenses $27,300

Less: Cash Payment for general and administrative $33,800

Preliminary cash balance before loan activity for April = $8,100