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In: Accounting

X Company has the following budgeted cash flows for January Cash collections    $55,000 Cash Payments...

X Company has the following budgeted cash flows for January

Cash collections    $55,000
Cash Payments
Inventory 17,000
Operating Expenses 13,000
Capital Expenditures 18,000

If the cash balance is $5,000 on January 1 and the company wants to maintain a minimum cash balance of $5,000, what amount can either be invested or used to pay down existing debt for January?

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Expert Solution

Calculation of Cash to be invested or used to pay down Existing debt of January.

Beginning cash Balance

$          5,000.00

Cash collections

$        55,000.00

Cash Available

$        60,000.00

Cash Payments

Inventory

$        17,000.00

Operating Expenses

$        13,000.00

Capital Expenditures

$        18,000.00

Total Cash Payments

$        48,000.00

Ending Cash Balance

$        12,000.00

Minimum Cash Balance

$          5,000.00

Cash to be invested or used to pay down Existing debt

$          7,000.00

ekkarill92 answered 2 years ago
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