Reference no: EM13335007

The sales of Alpha Company in March were $92,000. The Balance sheet of Alpha Company (31 March) is given below.

• The projected sales in April and May are $110,000 and $184,000 respectively.
• Alpha sales are 70% cash and 30% credit, collected in the following month. It has no currently overdue accounts and anticipates none in the future.
• The company will purchase a second hand truck on 1 May 2008: $8,000
• Miscellaneous cash expenses: 5% of the current sales
• Rent: $4,600/month
• Insurance expense: paid once a year (beginning of January) = $5,520;
• Depreciation expense: $1,150/month
• Tax rate: 0%
• Wages: $5650/month + 15% commission of sales/month
• 70% of the wages made in a specific month are paid in that month, the rests are paid in the following month)
• The inventory policy of the company is to begin a month with a sufficient inventory to cover 80% of sales + $36,000 cushion
• Cost of Goods Sold: 65% of sales
• 60% of the purchases made in a specific month are paid in that month, the rests are paid in the following month).
• Alpha borrowed from one of its founder at 1.5% interest/month for the next 2 years. Alpha borrows from and repays the founder at the end of the month. The agreement with this founder stipulates a $30,000 minimum cash balance in the venture's checking account.

Construct Alpha's cash budget, income statement, balance sheet and statement of cash flow for April.