Minden Company is a wholesale distributor of premium European chocolates. The company's b below: The company is in the process of preparing a budget for May and has assembled the following a. Sales are budgeted at $262,000 for May. Of these sales, $78,600 will be for cash; the remai month's credit sales are collected in the month the sales are made, and the remainder is coll April 30 accounts receivable will be collected in May. b. Inventory purchases are expected to total $196,000 during May. These purchases will all be purchases are paid for in the month of purchase; the remainder are paid in the following mor to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $84,000. d. Selling and administrative expenses for May are budgeted at $87,300, excluding depreciati cash. Depreciation is budgeted at $6,400 for the month. e. New refrigerating equipment costing $13,000 will be purchased for cash during May. f. The note payable on the April 30 balance sheet will be paid during May, with $550 in interes g. During May, the company will borrow $28,900 from its bank by giving a new note payable t note will be due in one year. 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May. (Hint: In the financing section, make sure to denote cash outflows as negative numbers. In the cash disbursements section, the cash outflows should be written as positive numbers. I know this seems counterintuitive accountants tend to write costs as positive numbers if they are listed in a section of the financial statements that is already labeled as "costs" or "expenses" or "disbursements" because then you know they are all outflows. But in a section where inflows and outflows are mixed, like in the financing section, they make the outflows negative numbers.) 4. Prepare a budgeted income statement for May. (Hint: here, the interest payment will have a positive sign. Another hint: Remember from ACTG 211 that Cost of Goods Sold = beginning inventory account balance + inventory purchase cost - ending inventory account balance.) 5. Prepare a budgeted balance sheet as of May 31. (Hint: You won't need every line on the worksheet. There should be four 'asset' items and four 'liability and owners' equity' items, matching the categories in the beginning balance sheet above. Another hint: Remember from ACTG 211 that "Buildings and Equipment, net of depreciation" is increased every month by any new building or equipment purchases, and decreased by any depreciation. May depreciation is given in part d above.) Complete this question by entering your answers in the tabs below. 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May
