Question

Problem 7-07A You are provided with the following information taken from Larkspur, Inc.'s March 31, 2022, balance sheet. Cash $12,100 Accounts receivable 20,660 Inventory 36,530 Property, plant, and equipment, net of depreciation 121,100 Accounts payable 22,810 Common stock 152,200 Retained earnings 11,690 Additional information concerning Larkspur, Inc. is as follows. Gross profit is 27% of sales. 1. Actual and budgeted sales data: March (actual) 2. $47,400 April (budgeted) 71,600 Sales are both cash and credit. Cash collections expected in April are: 3. March $18,960 (40% of $47,400) April (60% of $71,600) 42,960 $61,920 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: 4. Purchases March $22,810 Purchases April 28,780 $51,590 Cash operating costs are anticipated to be $12,500 for the month of April 5.

Answer 1

LARKSPUR, INC. Cash Budget For the Month of April Amount $12,100 Beginning Cash balance Add: Expected Cash Collection in April March Sales April Sales Total Cash Received Total Cash Available Less: Payment of march purchase Payment of April purchase Cash operating Expenses Equipment purchases Total Cash Disbursements Excess of Cash available over disbursements Finincing: Add: Borrowings Less: Repayments Interest Total Financing ($12,920 - $7,240) Ending Cash Balance $18,960 $42,960 $61,920 $74,020 $22,810 $28,780 $12,500 $2,690 $66,780 $7,240 $5,680 $5,680 $12,920