P22-25A Class Printing Supply of Baltimore has applied for a loan

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P22-25A Preparing an operating and a financial budget [50–60 min]

Class Printing Supply of Baltimore has applied for a loan. Bank of America has requested a budgeted balance sheet at April 30, 2012, and a budgeted statement of cash flows for April. The March 31, 2012, budgeted balance sheet follows:

CLASS PRINTING SUPPLY  Budgeted Balance Sheet March 31, 2012
Assets Liabilities
Current assets:		Current liabilities:
Cash	$ 50,500	Accounts payable	$ 8,600
Accounts receivable	12,800
Inventory	11,900	Total liabilities	$ 8,600
Total current assets	$ 75,200	Stockholders’ Equity
Plant assets:		Common stock	42,000
Equipment and fixtures	81,100	Retained earnings	93,200
Less: Accumulated depreciation	12,500	Total stockholders’ equity	$135,200
Total plant assets	$ 68,600
Total assets	$143,800	Total liabilities and stockholders’ equity	$143,800

As Class Printing’s controller, you have assembled the following additional information:

1. April dividends of $2,500 were declared and paid.
   
2. April capital expenditures of $16,400 budgeted for cash purchase of equipment.
   
3. April depreciation expense, $700.
   
4. Cost of goods sold, 40% of sales.
   
5. April operating expenses, including salaries, total $38,000, 20% of which will be paid in cash and the remainder will be paid next month.
   
6. Additional April operating expenses also include miscellaneous expenses of 5% of sales, all paid in April.
   
7. April budgeted sales, $89,000, 60% is collected in April and 40% in May.
   
8. April cash payments of March 31 liabilities incurred for March purchases of inventory, $8,600.
   
9. April purchases of inventory, $10,900 for cash and $37,500 on credit. Half the credit purchases will be paid
   

and so on ......