en Company is a wholesale distributor of premium European chocolates. The company's nce sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash 16,700 Accounts receivable Inventory 23 090 Buildings and equipment, net of depreciation 258.090 Total assets $387,200 Liabilities and Stockholders' Equity Accounts payable 86,750 Note payable 15,700 Common stock 180,000 Retained earnings 104,750 Total liabilities and stockholders' equity $387,200 The company is in the process of preparing a budget for May and has assembled the following data: . Sales are budgeted at $240,000 for May. Of these sales, $72,000 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. Purchases of inventory are expected to total $118,000 during May. These purchase remainder 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- The May 31 inventory balance is budgeted arare budgeted d. Selling and administrative expenses for May are budgeted at $93,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted payable on the April 30 balance sheet will be paid during May, with $160 in interest. (Al of the interest relates to May.) New refrigerating equipment costing $15,000 will be purchased for cash during May. During May, the company will bor bank for that amount. The new note will be due in one year. Required: 1-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases . . Minden Company Schedule of Expected Cash Collections Cash sales-May Collections on account receivable April 30 balance May sales Total cash receipts Minden Company Schedule of Expected Cash Disbursements April 30 accounts payable balance May purchases Total cash payments 1-b. Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Minden Company Cash Budget For the Month of May Beginning cash balance Add collections from customers Total cash available Less cash disbursements Purchase of inventory Selling and administrative expenses Purchases of equipment Total cash disbursements Excess of cash available over disbursements Financing : Borrowing-note Repayments-note Interest Total financing Ending cash balance format 2. Prepare a budgeted income statement for May using the absorption costing income statement Minden Company Budgeted Income Statement For the Month of May Cost of goods sold:3. Prepare a budgeted balance sheet as of May 31. Total assets Liabilities and Stockholders' Equity Total liabilities and stockholders' equity
