You are provided with the following information taken from Burlington Inc.\'s Ma

Question

You are provided with the following information taken from Burlington Inc.'s March 31, 2007, balance sheet.

            

Additional information concerning Burlington Inc. is as follows.

Calculate cash collections in April for March and April sales.

Cash collections in April

Calculate cash disbursements in April related to March and April purchases.

Cash disbursements in April

Complete the cash budget for the month of April below. (List multiple items in order of magnitude. If there is a deficiency of available cash over disbursements, show amount in (parenthesis). )

$

      Cash $ 8,000 Accounts receivable 20,000 Inventory 36,000 Property, plant, and equipment, net of depreciation 120,000 Accounts payable 22,400 Common stock 150,000 Retained earnings 11,600 You are provided with the following information taken from Burlington Inc.'s March 31, 2007, balance sheet. Additional information concerning Burlington Inc. is as follows. 1. Gross profit is 25% of sales. 2. Actual and budgeted sales data: 3. Sales are 60% for cash and 40% on credit. There are no sales discounts, and credit sales are collected in the month following the sale. 4. Half of a month's purchases are paid for in the month of purchase and half in the following month. Purchases of inventory totaled $44,800 for the month of March and are anticipated to total $52,200 for the month of April. Ending inventory is expected to be $39,450 at the end of April. 5. Cash operating costs are anticipated to be $12,700 for the month of April. 6. Equipment costing $2,500 will be purchased for cash in April. 7. The company wishes to maintain a minimum cash balance of $8,000. 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 12% per year, and interest expense is accrued at the end of the month and paid in the following month. Calculate cash collections in April for March and April sales. Cash collections in April Calculate cash disbursements in April related to March and April purchases. Cash disbursements in April Complete the cash budget for the month of April below. (List multiple items in order of magnitude. If there is a deficiency of available cash over disbursements, show amount in (parenthesis). )

Explanation / Answer

Cash collection in April relatedto March and April sales March $20,000 April 39000 Total $59,000 Cash disbursements in April related to Marchand April purchases March 2240 April 26100 Total 28340 CASH BUDGET APRIL30,2007 Beginning cash balance $8,000 Add: Receipts collection from customer 20000 cash sales 39000 total receipts 59000 Total availablecash $67,000 Less: Disbursement payment of march purchases 2240 April cash purchases 26100 Equipment purchases 2500 Cash operating cost 2700 total disbursement 33540 Excess of available cash overdisbursement $33,460 Ending balance $33460

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