Preparing a Cash Budget, Income Statement and Balance Sheet

Check Figures

$(1)$ April $30$ cash balance: $$8,900$

$(2)$ NI: $$15,900$

The Best Chocolate Company is a wholesale distributor of premium European chocolates. The company$$s balance sheet on March $31$ is as follows:

The company is in the process of preparing budget data for April. A number of budget items have already been prepared, as follows:

a$.$ Sales are budgeted at $$200,000$ for April. Of these sales, $$60,000$ will be for cash; the remainder will be credit sales. One$-$half of a month$$s credit sales are collected in the month the sales are made, and the remainder are collected in the following month. All of the April $30$ receivables will be collected in April.

b$.$ Purchases of inventory are expected to total $$120,000$ during April. These purchases will all be on account. $40\%$ of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the March $31$ accounts payable to suppliers will be paid during April.

c$.$ The April $30$ inventory balance is budgeted at $$40,000.$

d$.$ Operating expenses for April are budgeted at $$72,000,$ exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $$2,000$ for the month.

e$.$ The note payable on the March $31$ balance sheet will be paid during April, with $$100$ in interest. $($All of the interest relates to April.$)$

f$.$ New refrigerating equipment costings $$6,500$ will be purchased for cash during April.

g$.$ During April, the company will borrow $$20,000$ from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Please answer the following $3$ questions:

$1.$ Prepare a cash budget for April. Support your budget with schedules showing budgeted cash receipts from sales and budgeted cash payments for inventory purchases.

$2.$ Prepare a budgeted income statement for April. Use the traditional income statement format.

$3.$ Prepare a budgeted balance sheet as of April $30.$