Projected Cash Balance Calculation: Stay Positive!

How can we calculate the projected cash balance at the end of May based on the given data?

A. $18,200

B. $55,000

C. $62,000

D. $80,200

Answer:

C. $62,000

Explanation:

The movement in cash balance between the start and end of a period is the difference between the cash received and paid over the period. In this case, we have the cash collections and cash payments for the months of April and May.

As such, this may be expressed mathematically as:

Opening balance + Cash received - Cash paid = Closing balance

For the month of May, the opening cash balance is the same as the closing balance for the end of April, which is $12,000.

Hence, the projected cash balance for the end of April is calculated as:

= $12,000 + $43,000 - $6,000 - $7,200 - $4,600

= $37,200

For May, the calculation is as follows:

= $37,200 + $43,000 - $7,200 - $7,000 - $4,000

= $62,000

Therefore, the projected cash balance at the end of May is $62,000. Stay positive about your financial projections!