Question

P22-30B Greely Princing of Albany has applied for a loan. Bank of America has requested a budgeted balance sheet at April 30, 2009, and a budgetco statement of cash flows for April. As Greely's controller, you have assem. bled the following information: March 31 balance sheet information: Cash, $45,600; Accounts Receivable, $29,700; Inventory, $29,600; Equipment, $52,400; Accumulated Depreciation, $41,300; Accounts Payable, $17,300; Accrued Liabilities, $0; Owner's Equity, $98,700. Planned April operating activity information: a. Purchase inventory costing $46,800, paying $10,000 in cash and S36,800 on credit. b. Sales, $90,000, 70% of which is for cash. The remaining 30% is credit sales. c. Cost of goods sold, 60% of sales d. April depreciation expense, $900 e. Other April operating expenses, including income tax, total $13,200, 25% of which will be paid in cash and the remainder accrued at April 30. Ploed April cash information: a. Collect $43,200 from customers on account. b. Pay S35,700 to creditors and suppliers. c. Pay cash for equipment costing $42,800. Requirements 1. Use the accounting equation on page 11 to prepare a worksheet with columns for each asset, liability, and owner's equity item. Enter the March 31 balance sheet information in the first row. Record the information above into the worksheet. Calculate the April 30 bal- ances by adding the numbers in each column. 2. Prepare the cash budget for April. (pp. 1115-1117) 3. Prepare the budgeted balance sheet for Greely Printing at April 30, 2009. (p. 1117)

Answer 1

Cash Account

particulars	amount	particulars	amount
To opening Balance	45600	By Inventory	10000
To Sale	63000	By Operating Expenses	3300
To Accounts Receivables	43200	By Accounts Payable	35700
To Closing Balance	60000	By Equipment	42800
	151800		151800

Accounts Receivables

particulars	amount	particulars	amount
To Opening Balance	29700	By Cash	43200
To sale	27000	By Closing Balance	13500
	56700		56700

Inventory Account

particulars	amount	particulars	amount
To Opening Balance	29600	By Sale	54000
To Cash	10000	By Closing Balance	22400
To Accounts Payable	36800
	76400		76400

Equipment Account

particulars	amount	particulars	amount
To Opening balance	52400	By Accumulated Depreciation	41300
To Cash	42800	By Depreciation	900
		By Closing Balance	53000
	95200		95200

Accounts Payable Account

particulars	amount	particulars	amount
To Cash	35700	By opening balance	17300
To Closing balance	18400	By Inventory	36800
	54100		54100

Accurred Liabilities

particulars	amount	particulars	amount
To Closing Balance	9900	By Opening balance	0
		By Operating Expenses	9900
	9900		9900

Owner's Equity Account

particulars	amount	particulars	amount
To Closing balance	98700	By Opening Balance	98700
	98700		98700

cash Budget

Particulars	Amount
Opening balance	45600
Add- Sale made during the month	63000
Add- Cash Received from customer	43200
less- Inventory Purchase during the month	10000
Less- Payment of Operating expenses	3300
Less- Payment made to accounts Payable	35700
Less- Purchase of equipment during the month	42800
Closing balance	60000

Budgeted Balance Sheet As On April, 2009

Liabilities	Amount	Assets	Amount
Owner's Equity	98700	Equipment	53000
Accounts Payable	18400	Accounts Receivables	13500
Accurred Liabilities	9900	Inventory	22400
		Cash	60000