Minden Company is a wholesale distributor of premium European chocolates. The companys balance sheet as of April 30 is given below:

Minden Company Balance Sheet April 30
Assets
Cash	$	15,000
Accounts receivable		78,000
Inventory		37,750
Buildings and equipment, net of depreciation		232,000
Total assets	$	362,750
Liabilities and Stockholders Equity
Accounts payable	$	81,500
Note payable		14,000
Common stock		180,000
Retained earnings		87,250
Total liabilities and stockholders equity	$	362,750

The company is in the process of preparing a budget for May and has assembled the following data:

a.	Sales are budgeted at $294,000 for May. Of these sales, $88,200 will be for cash; the remainder will be credit sales. One-half of a months 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 $211,000 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 $77,000.
d.	Selling and administrative expenses for May are budgeted at $96,900, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,000 for the month.
e.	The note payable on the April 30 balance sheet will be paid during May, with $360 in interest. (All of the interest relates to May.)
f.	New refrigerating equipment costing $8,800 will be purchased for cash during May.
g.	During May, the company will borrow $20,900 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-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 88,200 Collections on account receivable: April 30 balance May sales 78,000 102,900 $269,100 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 custom Total cash available Less cash disbursement 15,000 269,100 284,100 ers Purchase of inventory Selling and administrative expenses Purchases of equipment 165,900 96,900 8,800 271,600 12,500 Total cash disbursements Excess of cash available over disbursements Financing Borrowing-note Repayments-note Interest 20,900 14,000 360 35,260 $47,760 Total financing Ending cash balance 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 custom Total cash available Less cash disbursement 15,000 269,100 284,100 ers Purchase of inventory Selling and administrative expenses Purchases of equipment 165,900 96,900 8,800 271,600 12,500 Total cash disbursements Excess of cash available over disbursements Financing Borrowing-note Repayments-note Interest 20,900 14,000 360 35,260 $47,760 Total financing Ending cash balance 2. Prepare a budgeted income statement for May using the absorption costing income statement format Minden Company Budgeted Income Statement For the Month of May Sales $294,000 Cost of goods sold Beginning inventory Purchases Goods available for sale Cost of goods sold 37,750 211,000 248,750 77,000 171,750 122,250 101,900 20,350 360 19,990 Ending inventory Gross margin Selling and administrative expenses et operating income nterest expense et income