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Question(s) / Instruction(s):

142.      Carson Company has gathered the following information:

April 30 ending cash balance

 

$45,000

 

Dividends paid in May

$12,000

 

Cash expenditures in May for operating expenses

$36,800

 

Depreciation expense in May

 

$4,500

 

Cash collections in May

$89,000

 

Merchandise purchases paid in cash in May

$56,200

 

Purchase equipment for cash in May

 

$17,500

     Carson Company desires to keep a minimum cash balance of $10,000.

     Required:     Prepare a cash budget for May, and indicate whether or not Carson Company meets minimum cash requirements.

143.      Letterman Company has gathered the following information:

March 31 ending cash balance

$80,000

 

 

Depreciation expense for April

$12,000

 

 

Dividends paid in April

$55,000

 

 

Cash collections in April

$510,000

 

 

Equipment purchase for cash in April

$94,500

 

 

Cash paid for operating expenses in April

$185,500

 

 

Merchandise paid for in April

$180,000

 

Letterman Company requires a minimum cash balance of $80,000.

Required:     

     Prepare a cash budget for April, and comment on whether or not minimum cash balance requirements are met.

144.      Madden Company has supplied the following information for 20X0:

Cash balance, January 1

 

$32,000

 

 

Total revenues

425,000

 

 

Total expenses

435,000

 

All revenues are collected when earned and all expenses are paid as incurred. The total expenses include $21,000 of depreciation

Required:
          
     a.     How much profit did Madden Company earn during 20X0?

     b.     What was the ending balance of cash?

     c.     Explain how cash increased during the year.

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