Problem 7-7A You are provided with the following information taken from Marin In

ID: 2523131 • Letter: P

Question

Problem 7-7A You are provided with the following information taken from Marin Inc.s March 31, 2017, balance sheet. Cash Accounts receivable Inventory Property, plant, and equipment, net of depreciation Accounts payable Common stock Retained earnings $ 11,990 23,790 36,150 121,900 22,900 150,300 12,040 Additional information concerning Marin Inc. is as follows 1. Gross profit is 25% of sales 2. Actual and budgeted sales data: March (actual) April (budgeted) $47,200 71,900 3. Sales are both cash and credit. Cash collections expected in April are: March April $18,880 43,140 $62,020 (40% of $47,200) (60% of $71,900) 4 Half of a month's purchases are naid for in the month of purchase and half in the following month, Cash disbursements expected in April are:

Explanation / Answer

Marin Inc.

Cash Budget for the month of April

Beginning Cash Balance

$11,990

Add: Cash Collection

$62,020

Total Available Cash

$74,010

Less: Cash Disbursement

Inventory Purchase

$51,080

Cash Operating Cost

$11,700

Equipment Purchase

$2,870

Total Cash Disbursement

$65,650

Excess(Deficiency) of Cash

$8,360

Financing:

Borrowings

$4,130

Repayments

Interest

Total Financing

$4,130

Ending Cash Balance

$12,490

Borrowings = Target Ending Cash Balance – Excess (Deficiency) of cash
=> $12,490 - $8360 = $4,130