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Cash overage or shortage

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?
$23,000 overage?
$22,000 shortage?
$43,000 overage?

Solution Preview

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) = ...

Solution Summary

The solution explains how to calculate the amount of cash overage or shortage.

$2.19