Minden Company is a wholesale distributor of premium European chocolates.

The companys balance sheet as of April 30 is as follows:

MINDEN COMPANY Balance Sheet April 30

Assets Cash $ 15,800 Accounts receivable, customers 62,500 Inventory 35,100 Buildings and equipment, net of depreciation 241,000 Total assets $ 354,400 Liabilities and Shareholders Equity Accounts payable, suppliers $ 73,200 Note payable 17,900 Capital shares, no par 214,000 Retained earnings 49,300 Total liabilities and shareholders equity $ 354,400.

The company is in the process of preparing budget data for May. A number of budget items have already been prepared, as follows:

a. Sales are budgeted at $540,000 for May. Of these sales, $162,000 will be for cash; the remainder will be credit sales. One-half of a months credit sales is collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 receivables will be collected in May.

b. Purchases of inventory are expected to total $324,000 during May. These purchases will all be on account. 30% of all purchases is paid for in the month of purchase; the remainder is 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 $108,000.

d. Operating expenses for May are budgeted at $194,400, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,400 for the month.

e. The note payable on the April 30 balance sheet will be paid during May, with $110 in interest. (All of the interest relates to May.)

f. New refrigerating equipment costing $9,900 will be purchased for cash during May.

g. During May, the company will borrow $54,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

1. Prepare a cash budget for May.

2. Prepare a budgeted income statement for May.

3. Prepare a budgeted balance sheet as of May 31.