Company A budgeted the following transactions from March:
Sales (60% collected in month of sales) $180,000
Cash Operating Expenses $105,000
Cash purchases of Capital Investments $50,000
Cash repayment on note payable $40,000
Depreciation of equipment $25,000
There was a $35,000 beginning cash balance. Sales for February were $75,000 and 40% expected to be collected in the month following the sales. The company desires to have $20,000 and the cash blance. Determine the amount of cash overage or shortage.
Is it $42,000 short?
The cash collection in the month is
February Sales (40% to be collected in March) = 75,000X0.4=30,000
March Sales (60% to be collected in March) = ...
The solution explains how to calculate the amount of cash overage or shortage.