Question 2 1.06/2 Your answer is partially correct. You are provided with the following information taken from Teal Mountain Inc.'s March 31,2017, balance sheet. Cash Accounts receivable Inventory Property, plant, and equipment, net of depreciation Accounts payable Common stock Retained earnings 12,060 20,670 36,800 122,800 23,330 152,400 12,520 Additional information concerning Teal Mountain Inc. is as follows. 1. Gross profit is 27% of sales. 2. Actual and budgeted sales data: March (actual) April (budgeted) $46,500 73,300 3. Sales are both cash and credit. Cash collections expected in April are: March April $18,600 43.980 $62,580 (40% of $46,500) (60% of$73,300) 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: $23,330 28,830 $52,160 Purchases March Purchases April 5. Cash operating costs are anticipated to be $11,530 for the month of April. 6. Equipment costing $2,670 will be purchased for cash in April. 7. The company wishes to maintain a minimum cash balance of $12,290. 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 14% per year, and interest expense is accrued at the end of the month and paid in the following month. Prepare a cash budget for the month of April. Determine how much cash Teal Mountain Inc. must borrow, or can repay, in April. Prepare a cash budget for the month of April. Determine how much cash Teal Mountain Inc. must borrow, or can repay, in April TEAL MOUNTAIN INC. Cash Budget For the Month Ending April 30, 2017 Beginning cash balance 12060 Add : Cash receipts Collections from customers Cash sales Cash sales Total available cash Less : Cash disbursements Payment of March purchases 23330 Payment of April purchases 28830 Cash operating costs Equipment purchase Cash operating costs Equipment purchase Total disbursements Excess (deficiency) of available cash over disbursements Financing Borrowings Repayments Ending cash balance