A Naples GC begins the week with $48,500 cash. Collections are $176,000. Checks to vendors are $149,500 and payroll is $32,400. What ending cash should the cash budget show?
Correct Answer
C) $42,600
Ending cash equals beginning cash plus collections minus vendor checks and payroll: $42,600.
Why This Is the Correct Answer
Ending cash equals beginning cash plus collections minus vendor checks and payroll: $42,600.
Why the Other Options Are Wrong
Option A: $32,600
$32,600 is below the supported result for cash budget; it likely skips a premium-pay or employer-cost component.
Option B: $38,100
$38,100 is below the supported result for cash budget; it likely skips a premium-pay or employer-cost component.
Option D: $74,500
$74,500 is above the supported result for cash budget; it likely pays the wrong premium tier or counts the same hours twice.
Memory Technique
Cash Budget ladder for Updating Short-Term: hours climb before dollars add up.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Cash Budgeting, Preparing a Cash Budget; use the job ledger figures in the stem and recompute the same accounting measure.
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