Tortilla Corp The Cash Balance on April 1 Is $14,000

question 73

Multiple Choice

Tortilla Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | } \hline & \text { Apr } & \text { May } & \text { Jun } \\\hline \text { Cash collections } & \$ 42,000 & \$ 40,000 & \$ 45,000 \\\hline \text { Cash payments: } & & & \\\hline \text { Purchases of direct materials } & 6,000 & 7,000 & 5,000 \\\hline \text { Operating expenses } & 7,000 & 9,000 & \\\hline \text { Capital expenditures } & 0 & 4,600 & 4,000 \\\hline\end{array}$$ The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

• A)$62,400
• B)$83,000
• C)$56,000
• D)$20,600

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Definitions:

Subsidiary's Net Income

The amount of profit remaining after all expenses, including taxes and operating costs, have been subtracted from total revenue, specific to a company that is controlled by another entity.

Ending Balance

The amount of money in an account at the end of an accounting period, after all debits and credits have been accounted for.

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence but not full control.

Excess Consideration

The amount paid over and above the fair value of net assets acquired in a business acquisition.