ByteBrew Co is a small business that sells subscription coffee pods to offices. The owner has noticed that sales are increasing but the bank balance is often low.
For the quarter ending 30 June 2026, ByteBrew Co recorded the following information.
Income statement (accrual basis) — quarter ended 30 June 2026
| Item | Amount |
|---|---|
| Sales revenue | \$240,000 |
| Cost of sales | \$120,000 |
| Gross profit | \$120,000 |
| Operating expenses (includes depreciation of \$12,000) | \$78,000 |
| Interest expense | \$6,000 |
| Net profit | \$36,000 |
Selected balance sheet items
| Item | 31 Mar 2026 | 30 Jun 2026 |
|---|---|---|
| Cash at bank | \$18,000 | \$9,000 |
| Accounts receivable | \$52,000 | \$88,000 |
| Inventory | \$40,000 | \$28,000 |
| Accounts payable | \$35,000 | \$46,000 |
| Bank loan (non-current) | \$150,000 | \$150,000 |
Additional information:
- ByteBrew Co purchased a new packing machine for \$30,000 cash during the quarter.
- The owner withdrew \$10,000 cash for personal use during the quarter.
- All sales and purchases are on credit unless paid in cash.
A junior employee drafted the following summary statement: “Because ByteBrew Co made a net profit of \$36,000 this quarter, cash from operations must also be \$36,000.”
Using your result from part (a) and the additional information, calculate ByteBrew Co’s net change in cash for the quarter and compare it to the actual change in cash shown on the balance sheet. Account for any difference.
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monitoring and controlling – cash flow statement, income statement, balance sheet
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