You are provided with the following information taken from Larkspur, Inc.’s March 31, 2022, balance sheet. Cash $ 12,060 Accounts receivable 23,980 Inventory 37,450 Property, plant, and equipment, net...

Cash

$ 12,060

Accounts receivable

23,980

Inventory

37,450

Property, plant, and equipment, net of depreciation

121,200

Accounts payable

22,760

Common stock

152,100

Retained earnings

11,630

1.

Gross profit is 24% of sales.

2.

Actual and budgeted sales data:

March (actual)

$47,400

April (budgeted)

73,000

3.

Sales are both cash and credit. Cash collections expected in April are:

March

$18,960

(40% of $47,400)

April

43,800

(60% of $73,000)

$62,760

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:

Purchase March     $22,760

Purchase April         28, 880

                                $51,640

5.

Cash operating costs are anticipated to be $12,110 for the month of April.

6.

Equipment costing $2,850 will be purchased for cash in April.

7.

The company wishes to maintain a minimum cash balance of $12,010. 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 12% per year, and interest expense is accrued at the end of the month and paid in the following month.