Wellington beginning cash is $158,900. Cash receipts are $584,000. Disbursements are $427,500 to vendors, $89,600 for payroll, and $28,400 for taxes. What ending cash is forecast?
Correct Answer
C) $197,400
Ending cash equals beginning cash plus receipts minus all listed disbursements.
Why This Is the Correct Answer
Ending cash equals beginning cash plus receipts minus all listed disbursements.
Why the Other Options Are Wrong
Option A: $315,400
$315,400 is above the supported result for cash budget; it likely pays the wrong premium tier or counts the same hours twice.
Option B: $287,000
$287,000 is above the supported result for cash budget; it likely pays the wrong premium tier or counts the same hours twice.
Option D: $169,000
$169,000 is below the supported result for cash budget; it likely skips a premium-pay or employer-cost component.
Memory Technique
Updates Wellington payroll: time, premium, reimbursement, proof in separate buckets.
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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