A Sarasota contractor starts the week with $84,500 cash. Expected receipts are $216,000, vendor payments are $162,400, payroll is $39,800, and office rent is $7,200. What projected ending cash should management use?
Correct Answer
A) $91,100
Projected ending cash equals beginning cash plus receipts less all planned disbursements.
Why This Is the Correct Answer
Projected ending cash equals beginning cash plus receipts less all planned disbursements.
Why the Other Options Are Wrong
Option B: $138,100
$138,100 is above the supported result for cash-flow forecast; it likely pays the wrong premium tier or counts the same hours twice.
Option C: $253,500
$253,500 is above the supported result for cash-flow forecast; it likely pays the wrong premium tier or counts the same hours twice.
Option D: $6,600
$6,600 is below the supported result for cash-flow forecast; it likely skips a premium-pay or employer-cost component.
Memory Technique
Owner Reviews payroll: time, premium, reimbursement, proof in separate buckets.
Reference Hint
Open-book path: tab Contractor's Manual, 2025 to Business Administration, Cash-Flow Planning and Control; confirm the administrative duty, record, or control described in the stem.
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