Sheet Medical Supply has applied for a loan. Marine National Bank has requested a budgeted balance sheet as of April 30, and a combined cash budget for April. As Sheet Medical Supply's controller, you have assembled the following information:

Requirement 1. Show separate computations for cash, inventory, and owners' equity balances. Begin by calculating the cash balance.

Cash
Beginning balance
Cash inflows:
Cash sales
Collections
Cash outflows:
Payment of March liabilities
Cash purchases
Payments for April (credit) purchases
Purchase of equipment
Operating expenses
Ending balance

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
Less:
Expenses
Ending balance

Prepare the budgeted balance sheet for Sheet Medical Supply at April 30.

	Sheet Medical Supply
	Budgeted Balance Sheet
	April 30

Assets
Current assets:
Cash
Accounts receivable
Inventory
Total current assets
Plant assets:
Equipment
Accumulated depreciation
Total assets

Liabilities
Current liabilities:
Accounts payable
Accrued expenses payable
Total liabilities
Owners' Equity
Owners' equity
Total liabilities and owners' equity

Requirement 2. Prepare the combined cash budget for April.

Sheet Medical Supply
Combined Cash Budget
For the Month Ended April 30
	Beginning cash balance, April 1
	Plus: Cash collections from customers
	Total cash available
	Less cash payments:
	Purchases
	Operating expenses
	Acquisition of equipment
	Ending cash balance, April 30

Requirement 3. Suppose Sheet 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 $16,000? (For this requirement, disregard the $42,600 initially budgeted for equipment purchases.)

The amount of cash available for equipment purchases in April, before financing, if the minimum desired ending cash
balance is $16,000 (and disregarding the $42,600 initially budgeted for equipment purchases) is		.

Part 8

Requirement 4. Before granting a loan to Sheet Medical Supply, Marine National Bank asks for a sensitivity analysis assuming that April sales are only $60,000 rather than the $90,000 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 Sheet Medical Supply, showing separate computations for cash, inventory, and owners' equity balances. Begin by calculating the cash balance. (Round amounts to the nearest whole dollar.)

Cash
Beginning balance
Cash inflows:
Cash sales
Collections
Cash outflows:
Payment of May liabilities
Cash purchases
Payments for April (credit) purchases
Purchase of equipment
Operating expenses paid
Ending balance

Calculate the inventory balance. (Round amounts to the nearest whole dollar.)

Inventory
Beginning balance
Add:
Purchases
Less:
Cost of goods sold
Ending balance

Calculate the owners' equity balance. (Round amounts to the nearest whole dollar.)

Owners' Equity
Beginning balance
Add:
Revenues
Less:
Expenses
Ending balance

Prepare the budgeted balance sheet for Sheet Medical Supply at April 30.

	Sheet Medical Supply
	Budgeted Balance Sheet
	April 30

Assets
Current assets:
Cash
Accounts receivable
Inventory
Total current assets
Plant assets:
Equipment
Accumulated depreciation
Total assets

Liabilities
Current liabilities:
Accounts payable
Accrued expenses payable
Total liabilities
Owners' Equity
Owners' equity
Total liabilities and owners' equity

b. Suppose Sheet Medical Supply has a minimum desired cash balance of $17,000. Will the company need to borrow cash in April?

The company			have to borrow cash in April if sales revenue is $60,000. The company's cash balance is
	than the minimum balance of $17,000.