A company's cash sales for May are $300,000, its accounts receivable payments for May are $200,000, its beginning cash for May is $50,000, and there are no other cash inflows for May
Its accounts payable payments for May are $250,000, its wages and salaries for May are $100,000, its interest payments for May are $50,000, and there are no other outflows for May. What is the company's ending cash balance for May?
What will be an ideal response?
Answer: The total incoming cash flow for May = cash sales for May + accounts receivable payments for May = $300,000 + $200,000 = $500,000. The total outgoing cash flow for May = accounts payable payments for May + wages and salaries for May + interest payment for May = $250,000 + $100,000 + $50,000 = $400,000. Thus, its net cash flows for May are total incoming cash flow for May - total outgoing cash flow for May = $500,000 - $400,000 = $100,000. Ending cash balance for May = beginning cash for May + net cash flow for May = $100,000 + $50,000 = $150,000.
You might also like to view...
Companies discovering that customers are the best source of new-product ideas is called the "democratizing" of innovation
Indicate whether the statement is true or false
My health care insurance company puts small co-payment fees on drugs that many people use and much higher fees for experimental drugs that only rarely are needed by individuals on our health care insurance plan. My company is applying which ethical theory?
A. ethical egoism B. deontological theory C. virtue-based theory D. utilitarianism
________ is the optimal order quantity that will minimize the total inventory costs
Fill in the blank with correct word.
________ refers to how much of a product or service people want to buy at any given time
A) Commodity B) Surplus C) Supply D) Demand E) Equilibrium