You are provided with the following information taken from Wildhorse Inc.'s March 31, 2025, balance sheet. Cash Accounts receivable Inventory Property, plant, and equipment, net of depreciation Accounts payable Common stock Retained earnings 1. 2. 3. 4. 5. Additional information concerning Wildhorse Inc. is as follows. 6. 7. Gross profit is 25% of sales. Actual and budgeted sales data: March (actual) April (budgeted) April 42,420 Purchases April $48,200 $61,700 $11,600 70,700 20,180 36,010 120,800 Sales are both cash and credit. Cash collections expected in April are: March $19,280 (40% of $48,200) (60% of $70,700) 22,560 154,500 11,680 Half of a month's purchases are paid for in the month of purchase and half in the following month. Cash disbursements expected Purchases March $22,560 28,320 $50,880 Cash operating costs are anticipated to be $12,630 for the month of April. Equipment costing $2,560 will be purchased for cash in April. The company wishes to maintain a minimum cash balance of $12,190. 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 13% per year, and interest expense is accrued at the end of the month and paid in the following month. Prepare a cash budget for the month of April. Determine how much cash Wildhorse Inc. must borrow, or can repay, in April. (List items that increase cash balance first.)
You are provided with the following information taken from Wildhorse Inc.'s March 31, 2025, balance sheet. Cash Accounts receivable Inventory Property, plant, and equipment, net of depreciation Accounts payable Common stock Retained earnings 1. 2. 3. 4. 5. Additional information concerning Wildhorse Inc. is as follows. 6. 7. Gross profit is 25% of sales. Actual and budgeted sales data: March (actual) April (budgeted) April 42,420 Purchases April $48,200 $61,700 $11,600 70,700 20,180 36,010 120,800 Sales are both cash and credit. Cash collections expected in April are: March $19,280 (40% of $48,200) (60% of $70,700) 22,560 154,500 11,680 Half of a month's purchases are paid for in the month of purchase and half in the following month. Cash disbursements expected Purchases March $22,560 28,320 $50,880 Cash operating costs are anticipated to be $12,630 for the month of April. Equipment costing $2,560 will be purchased for cash in April. The company wishes to maintain a minimum cash balance of $12,190. 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 13% per year, and interest expense is accrued at the end of the month and paid in the following month. Prepare a cash budget for the month of April. Determine how much cash Wildhorse Inc. must borrow, or can repay, in April. (List items that increase cash balance first.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:You are provided with the following information taken from Wildhorse Inc.'s March 31, 2025, balance sheet.
Cash
Accounts receivable
Inventory
Property, plant, and equipment, net of depreciation
Accounts payable
Common stock
Retained earnings
1.
2.
3.
4.
5.
Additional information concerning Wildhorse Inc. is as follows.
6.
7.
Gross profit is 25% of sales.
Actual and budgeted sales data:
March (actual)
April (budgeted)
March
April
Purchases March
$48,200
$19,280
42,420
$61,700
Purchases April
$11,600
70,700
20,180
36,010
Sales are both cash and credit. Cash collections expected in April are:
(40% of $48,200)
(60% of $70,700)
120,800
22,560
154,500
11.680
Half of a month's purchases are paid for in the month of purchase and half in the following month. Cash disbursements expecte
$22,560
28,320
$50,880
Cash operating costs are anticipated to be $12,630 for the month of April.
Equipment costing $2,560 will be purchased for cash in April.
The company wishes to maintain a minimum cash balance of $12,190. 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 13% per year, and interest expense is accrued at the end of the month and paid in the following month.
Prepare a cash budget for the month of April. Determine how much cash Wildhorse Inc. must borrow, or can repay, in April. (List items
that increase cash balance first.)
WILDHORSE INC.
Cash Budget
E
+
Transcribed Image Text:Cash Budget
+
+
+
+
+
+
+
+
$
$
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