QUESTION 8 (20 marks; 36 minutes) The balance sheet of Limpsum Inc. as of March 31 2009, is given below: Limpsum Inc. Balance Sheet March 31, 2009 Assets Cash $ 8,000 Accounts receivable 72,000 Inventory 30,000 Plant & Equipment, net of depreciation 500,000 Total Assets $ 610,000 Liabilities & Shareholder's Equity Accounts Payable, suppliers $ 90,000 Note payable 15,000 Capital stock, no par 420,000 Retained earnings 85,000 Total liabilities & shareholders; equity $ 610,000 Limpsum Inc. has not budgeted previously, and for this reason it is limiting its master budget planning horizon to just one month - April 2009. The company has assembled the following budgeted data relating to the month of April: A) Sales are budgeted at $250,000. Of these sales, $60,000 will be for cash; the remainder will be credit sales. One half of a month's credit sales is collected in the month the sales are made, and the remainder is collected in the month following. All of the March 31 accounts receivable will be collected in April. B) Purchases of inventory are expected to total $200,000 during April. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder is paid in the following month. All of the March 31 accounts payable to suppliers will be paid during April. C) The April 30 inventory balance is budgeted at $40,000. D) Operating expenses for April were budgeted at $51,000, exclusive of depreciation. These expenses will all be paid in cash. Depreciation is budgeted at $2,000 for the month. E) The note payable on the March 31 balance sheet will be paid during April. The company's interest expense for April (on all borrowing) will be $500, which will be paid in cash. F) New equipment costing $9,000 will be purchased for cash during April. G) During April, the company will borrow $18,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. REQUIRED: Prepare a cash budget for April 2009.