COST Accounting Problem (Simple)
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Question 7 Instructions.png
CoursHeroTranscribedText: Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet on April 30 is as follows: HINDElIII CCHPAIW' Balance Sheet April 36 Assets Cash $ 14,638 Accounts Receivable, customers 61,088 Inventory 34,206 Buildings and equipment, net of depreciation 235,866 Total assets $344,366 Liabilities and Shareholders' Equity Accounts payable, suppliers $ TQM-GB Note payable 17-5368 Capital shares, no par 288,666 Retained earnings 48,168 Total liabilities and shareholders' equity $344,366 The company is in the process ofpreparing budget data for May. A number of budget items have already been prepared, as follows: a. Sales are budgeted at $480,000 for May. Ofthese sales, $144,000 will be for cash; the remainder will be credit sales. One-half ofa month's credit sales are collected in the month the sales are made, and the remainder are collected in the following month. All of the pril 30 receivables will be collected in May. b. Purchases of inventory are expected to total $288,000 during May. These purchases will all be on account. 40% ofall purchases are paid for in the month of purchase; the remainder are paid in the following month. All ofthe April 30 accounts payable to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $95,000. d. Operating expenses for May are budgeted at $1?2,800, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4, 800 forthe month. e. The note payable on the April 30 balance sheet will be paid during May, with $80 in interest. [All ofthe interest relates to May.) f. New refrigerating equipment costing $9 300 will be purchased for cash during May. g. During May, the company will borrow $48, 000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: 1. Prepare a cash budget for May. (Any "Repayments" and "Interest" should be indicated by a minus sign.) MINDEN COMPANY Cash Budget For the Month Ended May 31 Total cash available Deduct: Disbursements: Total cash disbursements Excess of receipts over disbursements Financing: Total financing2. Prepare a budgeted income statement for May. MINDEN COMPANY Budgeted Income Statement For the Month Ended May 31 Cost of goods sold: Goods available for sale Cost of goods sold3. Prepare a budgeted balance sheet as of May 31- Tstst ssssts _ Liabilities and Shareholders' Equity Total liabilities and shareholders' equity _
