Chaterlain Company Is Preparing Its Budget for the Third Quarter

question 92

Multiple Choice

Chaterlain Company is preparing its budget for the third quarter.The cash balance on 30 June was $34,000.Additional budgeted data is provided here:
$$\begin{array} { | l | l | l | l | } \hline & \text { Jul } & { \text { Aug } } & \text { Sep } \\\hline \text { Cash collections } & \$ 51,000 & \$ 56,000 & \$ 53,000 \\\hline \text { Cash payments } & & & \\\hline \text { Purchases of inventory } & 22,000 & 23,000 & 21,000 \\\hline \text { Operating expenses } & 32,000 & 26,000 & 34,000 \\\hline \text { Capital expenditures } & 10,000 & 5000 & 5000 \\\hline\end{array}$$
What amount should be shown in the cash budget for the cash balance at the end of July?

• A) $21,000
• B) $85,000
• C) $30,000
• D) $13,000

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Definitions:

Time Paper

Commercial paper or negotiable instruments, like promissory notes or bills of exchange, that have a specific maturity date.

Overdue

Referring to something, such as a payment or task, that has not been completed or paid by its due date.

Sunday

The day of the week considered the first day by some cultures and calendars and the seventh day by others, often associated with rest and religious activities.

Real Defenses

Legitimate legal defenses that can be raised against the enforcement of a negotiable instrument, including fraud, duress, or illegality.