Hilliard Company Budgeted the Following Transactions for April Year 2

question 60

Multiple Choice

Hilliard Company budgeted the following transactions for April Year 2: $\begin{array}{llr} \text { Sales (75\% collected in month of sale) }&\$200,000\\ \text {Cash operating expenses } &105,000\\ \text { Cash purchases of investments } &75,000\\ \text { cash payment of debt} &15,000\\ \text { Depreciation on operating assets} &12,000\\\end{array}$
The beginning cash balance was $50,000. The company desires to have a $25,000 ending cash balance. The surplus (or shortage) of cash before considering any borrowings in April would be:

• A) $40,000 surplus.
• B) $40,000 shortage.
• C) $20,000 shortage.
• D) There is no cash surplus or shortage.

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Definitions:

Specific Performance

A legal remedy requiring a party to carry out their specific duties under a contract, rather than simply paying damages.

Title

A formal document or legal right indicating ownership of property or assets.

Processed Goat Manure

The resulting product after goat manure has been treated or composted to be used as a fertilizer or soil conditioner.

Insolvent

A financial state in which an individual or organization is unable to pay off debts as they become due.