Liabilities and Stockholders' Equity Accounts payable ..... Note payable.... Common stock. ..... Retained earnings ........ Total liabilities and stockholders' equity ............ $ 63,000 14,500 180,000 42,500 $300,000 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $200,000 for May. Of these sales, $60,000 will be for cash; the remain- der 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 $120,000 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. The May 31 inventory balance is budgeted at $40,000. Selling and administrative expenses for May are budgeted at $72.000, exclusive of deprecia- tion. These expenses will be paid in cash. Depreciation is budgeted at $2,000 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $6,500 will be purchased for cash during May. g. During May, the company will borrow $20,000 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. Calculate the expected cash collections for May 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May. 4. Using Schedule 9 as your guide, prepare a budgeted income statement for May. 5. Prepare a budgeted balance sheet as of May 31. PROBLEM 8-20 Cash Budget; Income Statement: Balance Sheet; Changing Assumptions L08-2. LO8-4, LO8-8, LO8-9, LO8-10 Refer to the data for Minden Company in Problem 8-19. The company is considering making the following changes to the assumptions underlying its master budget: 1. Sales are budgeted for $220,000 for May. 2. Each month's credit sales are collected 60% in the month of sale and 40% in the month follow ing the sale. 3. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining 50% in the month following the purchase. All other information from Problem 8-19 that is not mentioned above remains the same