Need an Answer and Explain on

1. Owners' equity balances

2. Prepare the combined cash budget for April.

3. Suppose Key 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 $15,000? (For this requirement, disregard the $42,700 initially budgeted for equipment purchases.)

4. Before granting a loan to Key Medical Supply, City's First Bank asks for a sensitivity analysis assuming that April sales are only $58,667 rather than the $88,000 originally budgeted. (While the cost of goods sold will change, assume that purchases, depreciation, and the other operating expenses will remain the same as in the earlier requirements.)

A and B requirement

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Key Medical Supply has applied for a loan. City's First Bank has requested a budgeted balance sheet as of April 30, and a combined cash budget for April. As Key Medical Supply's controller, you have assembled the following information: (Click the icon to view the information.) Read the requirements. Requirement 1. Show separate computations for cash, inventory, and owners' equity balances. Begin by calculating the cash balance. Cash X T Beginning balance $ 40,100 Data table Cash inflows: Cash sales 61,600 a. March 31 equipment balance, $52,000; accumulated depreciation, $41,700. Collections 42,800 b. April capital expenditures of $42,700 budgeted for cash purchase of equipment. Cash outflows: c. April depreciation expense, $300. Payment of March liabilities (17,800) d. Cost of goods sold, 55% of sales. Cash purchases (10,800) e. Other April operating expenses, including income tax, total $12,800, 20% of which will be paid in cash and the remainder accrue at April 30. Payments for April (credit) purchases (18,300) f. March 31 owners' equity, $91,600. Purchase of equipment (42,700) g. March 31 cash balance, $40,100. (2,560) Operating expenses h. April budgeted sales, $88,000, 70% of which is for cash. Of the remaining 30%, half will be collected in April and half in May. 52,340 Ending balance i. April cash collections on March sales, $29,600. j. April cash payments of March 31 liabilities incurred for March purchases of inventory, $17,800. Calculate the inventory balance. k. March 31 inventory balance, $29,400. Inventory $ I. April purchases of inventory, $10,800 for cash and $36,600 on credit. Half of the credit purchases will be paid in April and half in May. Beginning balance Add: Purchases Print Done Less: Cost of goods sold Ending balance $ 29,400 47,400 (48,400) 28,400 Calculate the inventory balance. Inventory Beginning balance Add: Purchases Less: Cost of goods sold $ Ending balance Calculate the owners' equity balance. Owners' Equity Beginning balance Add: Revenues Expenses Ending balance Less: $ 29,400 47,400 (48,400) 28,400 Requirements 1. Prepare the budgeted balance sheet for Key Medical Supply at April 30. Show separate computations for cash, inventory, and owners' equity balances. 2. Prepare the combined cash budget for April. 3. Suppose Key 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 $15,000? (For this requirement, disregard the $42,700 initially budgeted for equipment purchases.) 4. Before granting a loan to Key Medical Supply, City's First Bank asks for a sensitivity analysis assuming that April sales are only $58,667 rather than the $88,000 originally budgeted. (While the cost of goods sold will change, assume that purchases, depreciation, and the other operating expenses will remain the same as in the earlier requirements.) a. Prepare a revised budgeted balance sheet for Key Medical Supply, showing separate computations for cash, inventory, and owners' equity balances. b. Suppose Key Medical Supply has a minimum desired cash balance of $18,000. Will the mpany need to borrow cash in April? Print Done X Key Medical Supply has applied for a loan. City's First Bank has requested a budgeted balance sheet as of April 30, and a combined cash budget for April. As Key Medical Supply's controller, you have assembled the following information: (Click the icon to view the information.) Read the requirements. Requirement 1. Show separate computations for cash, inventory, and owners' equity balances. Begin by calculating the cash balance. Cash X T Beginning balance $ 40,100 Data table Cash inflows: Cash sales 61,600 a. March 31 equipment balance, $52,000; accumulated depreciation, $41,700. Collections 42,800 b. April capital expenditures of $42,700 budgeted for cash purchase of equipment. Cash outflows: c. April depreciation expense, $300. Payment of March liabilities (17,800) d. Cost of goods sold, 55% of sales. Cash purchases (10,800) e. Other April operating expenses, including income tax, total $12,800, 20% of which will be paid in cash and the remainder accrue at April 30. Payments for April (credit) purchases (18,300) f. March 31 owners' equity, $91,600. Purchase of equipment (42,700) g. March 31 cash balance, $40,100. (2,560) Operating expenses h. April budgeted sales, $88,000, 70% of which is for cash. Of the remaining 30%, half will be collected in April and half in May. 52,340 Ending balance i. April cash collections on March sales, $29,600. j. April cash payments of March 31 liabilities incurred for March purchases of inventory, $17,800. Calculate the inventory balance. k. March 31 inventory balance, $29,400. Inventory $ I. April purchases of inventory, $10,800 for cash and $36,600 on credit. Half of the credit purchases will be paid in April and half in May. Beginning balance Add: Purchases Print Done Less: Cost of goods sold Ending balance $ 29,400 47,400 (48,400) 28,400 Calculate the inventory balance. Inventory Beginning balance Add: Purchases Less: Cost of goods sold $ Ending balance Calculate the owners' equity balance. Owners' Equity Beginning balance Add: Revenues Expenses Ending balance Less: $ 29,400 47,400 (48,400) 28,400 Requirements 1. Prepare the budgeted balance sheet for Key Medical Supply at April 30. Show separate computations for cash, inventory, and owners' equity balances. 2. Prepare the combined cash budget for April. 3. Suppose Key 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 $15,000? (For this requirement, disregard the $42,700 initially budgeted for equipment purchases.) 4. Before granting a loan to Key Medical Supply, City's First Bank asks for a sensitivity analysis assuming that April sales are only $58,667 rather than the $88,000 originally budgeted. (While the cost of goods sold will change, assume that purchases, depreciation, and the other operating expenses will remain the same as in the earlier requirements.) a. Prepare a revised budgeted balance sheet for Key Medical Supply, showing separate computations for cash, inventory, and owners' equity balances. b. Suppose Key Medical Supply has a minimum desired cash balance of $18,000. Will the mpany need to borrow cash in April? Print Done X