Assume the following data for Animal Gear Company: (Click the icon to view the assumptions.) 2(Click the icon to view budget information.) Requirements 1. Prepare a cash budget for April for Animal Gear. 2. Why do Animal Gear's managers prepare a cash budget addition to the revenue, expenses, and operating income budget? Requirement 1. Prepare a cash budget for April for Animal Gear. Begin the cash budget by calculating the cash available, then total disbursements, and finally the effects of financing and the ending cash balance. (Round your answers to the nearest whole dollar. Enter "O" for repayment of loan if excess cash does not exceed $10,000 at the end of April.) Cash Budget April 30 Cash balance, beginning Add receipts (1) (2) Total cash available for needs Deduct disbursements (3) (4) (5) (6) (7) (8) (9) (10) Total disbursements Cash excess (deficiency) Financing Repayment of loan Interest on loan Total effects of financing Ending cash balance, April 30 Requirement 2. Why do Animal Gear's managers prepare a cash budget in addition to the revenue, expenses, and operating income budget? Animal Gear's managers prepare a cash budget in addition to the operating income budget to (11) If Animal Gear is profitable on an accrual accounting basis, (12) Animal Gear's managers may then need to (13) Building a profitable operating plan (14) that adequate cash will be available. 1: More Info Animal Gear (AG) does not make any sales on credit. AG sells only to the public and accepts cash and credit cards; 90% of its sales are to customers using credit cards, for which AG gets the cash right away, less a 4% transaction fee. Purchases of materials are on account. AG pays for half the purchases in the period of the purchase and the other half in the following period. At the end of March, AG owes suppliers $8,400. During April they plan to purchase direct materials worth $13,285 AG plans to replace a machine in April at a net cash cost of $13,400. Labor, other manufacturing costs, and nonmanufacturing costs are paid in cash in the month incurred except of course depreciation, which is not a cash flow. Depreciation is $23,000 of the manufacturing cost and $14,500 of the nonmanufacturing (fixed) cost for April AG currently has a $2,700 loan at an annual interest rate of 12%. The interest is paid at the end of each month. If AG has more than $10,000 cash at the end of April it will pay back the loan. AG owes $5,800 in income taxes that need to be remitted in April. AG has cash of $5,000 on hand at the end of March. 2: Reference Revenue Budget For the Month of April Units Selling price Total Revenues 580 $ 190 $ 110,200 Cat-allac Dog-eriffic 215 260 55,900 $ Total 166,100 Manufacturing Overhead Budget For the Month of April Machine setup costs $ 9,100 Processing costs 59,000 Inspection costs 480 $ Total 68,580 Direct Manufacturing Labor Costs Budget For the Month of April Output units DMLH Total Hourly produced per unit Hours Wage Rate 600 3 1,800 $ 14 $ Total Cat-allac 25,200 Dog-eriffic 200 5 1,000 14 14,000 Total $ 39,200 Nonmanufacturing Costs Budget For the Month of April Salaries $ 18,400 Other fixed costs 19,000 Sales commissions 1,661 $ Total nonmanufacturing costs 39,061 (1) O O Cash sales Credit card sales O Direct manufacturing labor Sales commissions Direct materials O Manufacturing overhead O Income taxes Nonmanufacturing salaries Interest on loan O Other nonmanufacturing fixed costs Machinery purchase Repayment of loan (2) O O Cash sales O Credit card sales O Direct manufacturing labor Sales commissions Direct materials O Income taxes O Interest on loan O Machinery purchase Manufacturing overhead O Nonmanufacturing salaries 0 Other nonmanufacturing fixed costs Repayment of loan (3) O O Cash sales O Credit card sales Direct manufacturing labor O Direct materials O Income taxes O Machinery purchase Manufacturing overhead Nonmanufacturing salaries O Other nonmanufacturing fixed costs O Sales commissions O Cash sales O Credit card sales Direct manufacturing labor O Direct materials Income taxes O Machinery purchase O Manufacturing overhead Nonmanufacturing salaries O Other nonmanufacturing fixed costs O Sales commissions (5) O O Cash sales O Credit card sales O Direct manufacturing labor Direct materials Income taxes O Machinery purchase Manufacturing overhead O Nonmanufacturing salaries Other nonmanufacturing fixed costs O Sales commissions (6) O O Cash sales Credit card sales O Direct manufacturing labor O Direct materials Income taxes Machinery purchase Manufacturing overhead O Nonmanufacturing salaries O Other nonmanufacturing fixed costs Sales commissions (7) O O Cash sales O Credit card sales O Direct manufacturing labor O Direct materials Income taxes Machinery purchase Manufacturing overhead O Nonmanufacturing salaries O Other nonmanufacturing fixed costs Sales commissions (8) O Cash sales O Credit card sales O Direct manufacturing labor O Direct materials Income taxes O Machinery purchase O Manufacturing overhead Nonmanufacturing salaries Other nonmanufacturing fixed costs O Sales commissions (9) O O Cash sales O Credit card sales O Direct manufacturing labor O Direct materials Income taxes O Machinery purchase O Manufacturing overhead O Nonmanufacturing salaries Other nonmanufacturing fixed costs O Sales commissions (10) O O Cash sales O Credit card sales O Direct manufacturing labor Direct materials Income taxes O Machinery purchase O Manufacturing overhead O Nonmanufacturing salaries O Other nonmanufacturing fixed costs O Sales commissions (11) O encourage employees to increase sales. O plan cash flows to ensure that the company has adequate cash to pay expenses as they come due. show that certain payment obligations have already been met. (12) O it will show a positive cash balance on the cash budget. this does not mean that it will have sufficient cash to make scheduled payments. (13) O initiate a plan to borrow money to finance any shortfall. O use the extra cash on employee bonuses. (14) O guarantees does not guarantee