Goller Company is preparing a cash budget for the month of June. The following i
ID: 2454206 • Letter: G
Question
Goller Company is preparing a cash budget for the month of June. The following information is available:
Cash balance, May 31,2015 $10,000
Cash collections from customers in June 66,000
cash paid for merchandise in June 42,000
cash paid for operating expenses in June 12,000
purchase furniture for cash in June 3,000
Depreciation expense in June 5,000
amortization expense in June 5,000
The minimum cash balance desired is $10,000. What is the cash balance on June 30, 2015?
a. $19,000
b. $10,000
c. $11,000
d. $9,000
Explanation / Answer
Answer:
Correct answer is a.$19,000. Depreciation expense and amortization expense will not affect cash. Goller Company is able to make its minimum desired cash balance of $10,000(19,000>10,000).
Description Amount $ Cash balance, May 31,2015 10,000 Cash collections from customers in June 66,000 Cash paid for merchandise in June -42,000 Cash paid for operating expenses in June -12,000 Purchase furniture for cash in June -3,000 Cash balance, June 30,2015 19,000Related Questions
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