Supermarket Deluxe in Omaha will have cash receipts of $35,000 in April and cash disbursements of $30,000 for this month

Finance May 05, 2021

Supermarket Deluxe in Omaha will have cash receipts of $35,000 in April and cash disbursements of $30,000 for this month. If its beginning cash is $5,000 and its reserves are $2,000, what will its excess be for April?

a)There is no excess but a shortfall.

b) $5,000

c) $8,000

d) $10,500

Expert Solution

Computation of the excess reserve:-

Cash at the end of month = Beginning cash balance + Cash receipts - Cash disbursements

= $5,000 + $35,000 - $30,000

= $10,000

Excess reserve = Cash at the end of month - Reserve

= $10,000 - $2,000

= $8,000

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