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Alliance Printing of Baltimore has applied for a loan. Bank of America has requested a budgeted balance sheet at

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P22-33B Preparing an operating and a financial budget [50–60 min]
Alliance Printing 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:


ALLIANCE PRINTING 
Budgeted Balance Sheet March 31, 2012
Assets Liabilities
Current assets:
Current liabilities:
Cash
$ 51,100
Accounts payable
$ 7,800
Accounts receivable
14,900
Total liabilities
$ 7,800
Inventory
12,100
Total current assets
$ 78,100
Stockholders’ Equity
Plant assets:
Common stock
36,000
Equipment and fixtures
80,800
Retained earnings
102,800
Less: Accumulated depreciation
12,300
Total stockholders’ equity
$138,800
Total plant assets
$ 68,500
Total assets
$146,600
Total liabilities and stockholders’ equity
$146,600

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

a. April dividends of $8,000 were declared and paid.

b. April capital expenditures of $16,700, budgeted for cash purchase of equipment.

c. April depreciation expense, $400.

d. Cost of goods sold, 30% of sales.

e. April operating expenses, including salaries, total $35,000, 40% of which will be
paid in cash and the remainder will be paid next month.

f. Additional April operating expenses also include miscellaneous expenses of 5% of
sales, all paid in April.

g. April budgeted sales, $85,000, 60% is collected in April and 40% in May.

h. April cash payments of March 31 liabilities incurred for March purchases of
inventory, $7,800.

i. April purchases of inventory, $11,200 for cash and $37,300 on credit. Half the
credit purchases will be paid in April and half in May.

and so on ......

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