number 3

TES-312 Inc. is a

elallel, its accountants are preparing the company's 2nd quarter master budget. The company has

following balance sheet as of March 31:

CHART IS A PICTURE

TES-312 accountants have made the following estimates:

Sales for April, May, June, and

July will be $340,000, $360,000, $350,000, and $370,000, respectively.

sales are on

credit. Each month's credit sales are collected 35% in the

month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April

3. Each month's ending inventory must equal 25% of next month's cost of goods sold. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases

in the month of the

purchase and the remaining 60% in the month following the purchase. All

of the accounts payable at March 31 are related to previous merchandise purchases and will be

Paid

in April.

4. Monthly selling

and administrative expenses are always $44,000. Each month $6,000 of this total amount is depreciation expense and the remaining $38,000 is spent for expenses that are pald in the month

are incurred.

The company will not borrow money or pay or declare dividends during the 2nd quartet. The company will not issue any common stock or repurchase its own stock during the 2nd quarter.

How much is the company's expected cash disbursement for merchandise in the month of April?

TES-312 Inc. Balance Sheet March 31 Assets Cash Accounts receivable Inventory Plant and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 84,000 144,000 63,750 223,000 $514,750 $ 84,000 349,000 81,750 $514,750