Milton Company is a wholesaler of chocolates. The company presents us with the following information as of April 30:

Cash .. $ 9,000 Accounts receivable .. 54,000 Inventory .. 30,000 Building and equipment, net .. 207,000 Accounts payable $ 63,000

Note payable .. 14,500 Stock capital .. 180,000 Retained earnings 42,500

The company is in the process of preparing the budget for the month of May. Below are a series of items to prepare the cash budget:

1 Budgeted sales for May are $ 200,000. Of this item, 30% is collected on the spot and the rest is credit sales. 50% of credit sales are collected in the month of sale and the remainder is collected in the following month. All accounts receivable as of April 30 are collected in May. 2 Inventory purchases are expected to be $ 120,000 in May. They are all on credit. 40% of purchases are paid in the month of purchase, the remainder in the following month. All accounts payable as of April 30 are paid in May. 3 Budgeted inventory balance as of May 31 is $ 40,000 4 Budgeted SG&A expenses for May are $ 72,000. These expenses are paid in Cash. Depreciation is budgeted at the rate of $ 2,000 per month. 5 The April 30 Note Payable will be paid in May, with an additional $ 100 of interest. 6 I buy a new equipment that cost $ 6,000 to be paid in cash in May. 7 In May, he takes a loan for $ 20,000 to the Bank, signing a note that is due in one year.

Requirements:

Prepare a Cash Budget for the month of May. Support this budget with the Schedule of Cash Collections from sales "and Shedule of Cash Disbursements" for merchandise purchases. Prepare an Income statement