Question

You are provided with the following information taken from Metlock, Inc's March 31, 2022, balance sheet. Cash Accounts receivable Inventory Property, plant, and equipment, net of depreciation Accounts payable Common stock Retained earnings $ 11,860 23,480 36,810 123,700 22.430 152,000 12.240 Additional information concerning Metlock, Inc. is as follows. 1. Gross profit is 25% of sales. 2. Actual and budgeted sales data: March (actual) April (budgeted) $47.200 70.800 3. Sales are both cash and credit. Cash collections expected in April are: March $18,880 (40% of $47,200) April 42,480 (60% of $70,800) $61,360 4. Half of a month's purchases are paid for in the month of purchase and half in the following month. Cash disbursements expected in April are: Purchases March $22.430 Purchases April 28,140 $50,570 5. Cash operating costs are anticipated to be $12,570 for the month of April. 6. Equipment costing $2,780 will be purchased for cash in April. 7. The company wishes to maintain a minimum cash balance of $12.230. An open line of credit is available at the bank All borrowing is done at the beginning of the month, and all repayments are made at the end of the month. The interest rate is 14% per year, and interest expense is accrued at the end of the month and paid in the following month. Prepare a cash budget for the month of April. Determine how much cash Metlock, Inc. must borrow, or can repay, in April.

Answer 1

$11,860 $61,360 $73,220 в Metlock INC Cash Budget For the Month Ending April 30, 2022 4. Beginning Cash Balance 5 Add: Cash receipts March sales $18,8801 April Sales $42.480 Total cash receipts Total available cash 10 Less: Cash disbursements 11 March purchases $22,430 12 April purchases $28,140 13 Cash operating cost $12,570 Purchase for Equipment $2,780 15 Total disbursement 16 Cash excess 17 Financing 18 Add:Borrowing ($12230-$7300) 19 Less: Repayment 20 Ending cash balance 21 $65,920 $7,300 $4,930 $0 $12,230