Tortilla corp. has provided a part of its budget for the second quarter: apr may juncash collections $40,000 $40,000 $42,000cash payments: purchases of direct materials 7,200 7,000 4,500operating expenses 7,000 7,000 capital expenditures 10,000 4,000 20,000the cash balance on april 1 is $14,000. assume that there will be no financing transactions or costs during the quarter. calculate the projected cash balance at the end of may: (a) $51,800(b) $69,800(c) $54,000(d) $18,000

The correct option is A

Explanation:

For the month of April

Receipts = Opening + Collection

              = $14,000 + $40,000

              = $54,000

Payments = Purchases of direct materials + Operating expense + Capital expenditure

                = $7,200 + $7,000 + $10,000

                = $24,200

Closing Balance = Receipts - Payments

                           = $54,000 - $24,200

                          = $29,800

For the month of May

Receipts = Opening + Collection

              = $29,800 + $40,000

              = $69,800

Payments = Purchases of direct materials + Operating expense + Capital expenditure

                = $7,000 + $7,000 + $4,000

                = $18,000

Closing Balance = Receipts - Payments

                           = $69,800 - $18,000

                          = $51,800

Projected cash balance at the end of May is $51,800

answer; schedule c;