Question

You are provided with the following information taken from Teal Mountain Inc.’s March 31, 2022, balance sheet. Cash $12,060 Accounts receivable 20,670 Inventory 36,800 Property, plant, and equipment, net of depreciation 122,800 Accounts payable 23,330 Common stock 152,400 Retained earnings 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) $46,500 April (budgeted) 73,300 3. Sales are both cash and credit. Cash collections expected in April are: March $18,600 (40% of $46,500) April 43,980 (60% of $73,300) $62,580 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 $23,330 Purchases April 28,830 $52,160 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. (Do not leave any answer field blank. Enter 0 for amounts.) TEAL MOUNTAIN INC. Cash Budget choose the accounting period select an opening cash budget item $enter a dollar amount select between addition and deduction : select a cash budget item select an opening name for section one enter a dollar amount select a cash budget item enter a dollar amount select a closing name for section one enter a total amount for the section one select a summarizing line for the first part enter a total amount for first part select between addition and deduction : select an opening name for section two select a cash budget item enter a dollar amount select a cash budget item enter a dollar amount select a cash budget item enter a dollar amount select a cash budget item enter a dollar amount select a closing name for section two enter a total amount for the section two select a summarizing line for the second part enter a total amount for second part select an opening name for section three select between addition and deduction : select a cash budget item enter a dollar amount select between addition and deduction : select a cash budget item enter a dollar amount select a closing cash budget item $enter a total amount for the cash budget

Answer 1

Prepare a cash budget for the month of April. Determine how much cash Teal Mountain Inc. must borrow, or can repay, in April.

Answer:-

Determine how much cash Teal Mountain Inc. must borrow, or can repay, in April.

Teal mountain inc. must borrow in April, $4,010.