Question

Help with Accounting Homework.. CHapter 9 in Textbook Managerial Accounting by Tietz

Sheet Medical Supply has applied for a loan. Midwest's Commerce Bank has requested a budgeted balance sheet as of April 30, and a EEB (Click the icon to view the information.) Read the requirements. Requirement 1. Show separate computations for cash, inventory, and owners' equity balances. Begin by calculating the cash balance. Cash Beginning balance $ 40,500 Cash inflows: Cash sales Collections Cash outflows: 60,200 42,300 Payment of March liabilities Cash purchases Payments for April (credit) purchases Purchase of equipment Operating expenses Ending balance

Answer 1

Requirement 1:

Sheet Medical Supply

Budgeted Balance Sheet

April 30

Assets	$	$
Current assets
Cash	51,030
Accounts Receivable	12,900
Inventory	21,000	84,930
Total Current Assets
Equipment
Cost	94,600
Accumulated Depreciation	(42,000)	52,600
Total Assets		137,530
Liabilities and Equity
Accounts Payable	18,250
Accrued Expenses	10,880
Total Current Liabilities		29,130
Owners' Equity		108,400
Total Liabilities and Equity		137,530

Sheet Medical Supply

Cash Budget

For the month ending April 30

	$	$
Beginning Balance		40,500
Cash Inflows:
Cash Sales		60,200
Collections		42,300
Total Cash Available		143,000
Cash Outflows
Payment for March Liabilities	17,500
Cash Purchases	10,900
Payment for April ( credit) purchases	18,250
Purchase of Equipment	42,600
Operating Expenses	2,720
Total Cash Outflows		91,970
Ending Balance		51,030

Cost of Goods Sold for April = $ 86,000 x 65% = $ 55,900.

Ending Inventory as on April 30 = Cost of Goods Available for Sale - Cost of Goods Sold = Beginning Inventory + Purchases - COGS = $ ( 29,500 + 10,900 + 36,500 - 55,900) = $ 21,000.

Budgeted Income Statement:

For the month ended April 30

Sales	$ 86,000
Cost of Goods Sold	55,900
Gross Profit	30,100
Expenses
Operating Expenses	(13,600)
Depreciation	( 800)
Net Operating Income	15,700