The beginning cash balance for April, is the cash from March 31 in the Asset section of the balance sheet. In the merchandise purchases budget, in April, we need 50% of March purchases (that amount is also given to us 3/31 Accounts payable of $100,000 on page 415). Therefore, Total cash disbursements for April is (50% x $316,000 April purchases) + ($100,000 remaining March purchases to be paid) = $258,000.
Class, Here are some hints. Lets start from the beginning:
First, take budgeted sales in units for each month of April, May, and June, and multiply by the selling price of $10/unit. You will get TOTAL SALES which you will also need to plug into the Income Statement later. For example, …show more content…
P.S. April financing should be $170,000 as I showed above. When you calculate Mays borrowings, don't even think about Aprils financing, do the calculation independently. You wont pay any interest until June (dont worry about accruing it for a cash budget, and since the income statement is for all three months anyway, we can think of the June cash outlay for interest expense as paying off everything that would have been accrued anyway: please see my calculation for the June interest payment above (hint $5,300 is interest payment see my excel notes in the sample). You must pay off all interest due before the bank lets you pay any