P7-7A Prepare a cash budget. You are provided with the following information taken from Moynahan Inc's March 31, 2017, balance sheet Cash Accounts receivable Inventory Property, plant, and equipment, net of depreciation Accounts payable Common stock Retained earnings 11,000 36,000 120,000 22,400 150,000 11,600 Additional information concerning Moynahan Inc. is as follows. . 1,Gross profit is 25% of sales. . 2.Actual and budgeted sales data: March (actual) $46,000 April (budgeted) 70,000 March $18,400 (40% of $46,000) April 42,000(60% of $70,000) 3.Sales are both cash and credit. Cash collections expected in April are $60,400 .4.Half of a month's purchases are paid for in the month of purchase and half in the following month. Cash disbursements expected in April are Purchases March $22,400 Purchases April 28,100 $50,500 5.Cash operating costs are anticipated to be $11,200 for the month of April. .6.Equipment costing $2,500 will be purchased for cash in April. 7.The company wishes to maintain a minimum cash balance of $9,000. 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 12% per year, and interest expense is accrued at the end of the month and paid in the following month. Instructions Prepare a cash budget for the month of April. Determine how much cash Moynahan Inc. must borrow, or can repay, in April Apr. borrowings $1,800