Balance Sheet April 30 Assets Cash $ 16,500 Accounts receivable 67,000 Inventory 32,000 Buildings and equipment, net of depreciation 249,000 Total assets 5364,500 Liabilities and Stockholders' Equity Accounts payable 5.68.750 Not payable 20, 500 Coon stock 180,000 Retained earning 95,250 Total llabilities and stockholders' equity $364,500 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $241,000 for May. Of these sales. $72.300 will be for cash, the remainder will be credit sales. One-half of a month's credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts receivable will be collected in May. b. Inventory purchases are expected to total $191,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase, the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May c. The May 31 inventory balance is budgeted at $86,000 d Selling and administrative expenses for May ate budgeted at $76,200, exclusive of depreciation. These expenses will be paid in con Depreciation is budgeted at $5,300 for the month e New refrigerating equipment costing $6,600 will be purchased for cash during May The note payable on the April 30 balance sheet will be paid during May, with $170 in interest. (All of the interest relates to May) Required: 1. Calculate the expected cash collections from customers for Moy. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for Moy. (Hint: In the financing section, make sure to denote cash outflows as negative numbers. In the cash disbursements section, the cash outflows should be written as positive numbers. I know this seems counterintuitive - accountants tend to write costs as positive numbers if they are listed in a section of the financial statements that is already labeled as costs" or "expenses or "disbursements" because then you know they are all outflows. But in a section where inflows and outflows are mixed, like in the financing section, they make the outflows negative numbers) 4. Prepare a budgeted income statement for May. (Hint here, the interest payment will have a positive sign. Another hint: Remember from ACTG 211 that Cost of Goods Sold-beginning inventory account balance inventory purchase cost-ending Inventory account balance.) 5. Prepare a budgeted balance sheet as of May 31, (Hint: You won't need every line on the worksheet. There should be four asset items and four ability and owners' equity items matching the categories in the beginning balance sheet above. Another hint: Remember from ACTG 21 that "Buildings and Equipment, net of depreciation is increased every month by any new building or equipment purchases, and decreased by any depreciation. May depreciation is given in part d above)
