Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help with this! Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given
I need help with this!
Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation $ 9,500 56,500 53,250 234,000 Total assets $353,250 Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained eamings $ 79,000 20,000 180,000 74,250 Total liabilities and stockholders' equity $353,250 The company is in the process of preparing a budget for May and has assembled the following data a. Sales are budgeted at $299,000 for May. Of these sales, $89,700 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. Purchases of inventory are expected to total $169,000 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 $42,000 d. Selling and administrative expenses for May are budgeted at $89,700, exclusive of depreciation. These e. The note payable on the April 30 balance sheet will be paid during May, with $320 in interest. (All of the f. New refrigerating equipment costing $7,200 will be purchased for cash during May expenses will be paid in cash. Depreciation is budgeted at $2,250 for the month interest relates to May.) During May, the company will borrow $25,200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year g. 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 payment:sStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started