Hugo Medical Supply has applied for a loan. Pacific Commerce Bank has requested a budgeted balance sheet as of April 30 and a combined cash budget for April. As Hugo Medical Supply’s controller, you have assembled the following information:
- March 31 equipment balance, $52,600; accumulated depreciation, $41,300
- April capital expenditures of $42,400 budgeted for cash purchase of equipment
- April depreciation expense, $700
- Cost of goods sold, 60% of sales
- Other April operating expenses, including income tax, total $14,200, 35% of which will be paid in cash and the remainder accrued at April 30
- March 31 owners’ equity, $92,600
- March 31 cash balance, $40,300
- April budgeted sales, $90,000, 70% of which is for cash. Of the remaining 30%, half will be collected in April and half in May.
- April cash collections on March sales, $29,100
- April cash payments of March 31 liabilities incurred for March purchases of inventory, $17,300
- March 31 inventory balance, $29,200
- April purchases of inventory, $10,700 for cash and $36,300 on credit. Half of the credit purchases will be paid in April and half in May.
- Prepare the budgeted balance sheet for Hugo Medical Supply at April 30. Show separate computations for cash, inventory, and owners’ equity balances.
- Prepare the combined cash budget for April.
- Suppose Hugo Medical Supply has become aware of more efficient (and more expensive) equipment than it budgeted for purchase in April. What is the total amount of cash available for equipment purchases in April, before financing, if the minimum desired ending cash balance is $14,000? (For this requirement, disregard the $42,400 initially budgeted for equipment purchases.)
Please use the library for your research. Do not use sites such as Wikipedia or Investopedia as your sources. If you use a website, make sure you review APA guidelines as to how to properly format websites as a source. Minimum word requirement: 400; include a cover page and a separate reference page listing your sources in proper APA style. Minimum 2 sources; your textbook can be one of your sources.