Minden Company is a wholesale distributor of premium European chocolates The companys balance sheet on April 30 is as follows MINDEN COMPANY Balance Sheet April 30 Assets Cash $ 11,400 Accounts receivable, customers 57,000 Inventory 31,800 Buildings and equipment, net of depreciation 219,000 Total assets $ 319,200 Liabilities and Shareholders Equity Accounts payable, suppliers $ 66,600 Note payable 15,700 Capital shares, no par 192,000 Retained earnings 44,900 Total liabilities and shareholders equity $ 319,200 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 $320,000 for May Of these sales, $96,000 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 are collected in the following month All of the April 30 receivables will be collected in May b Purchases of inventory are expected to total $192,000 during May These purchases will all be on account 40 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 $64,000 d Operating expenses for May are budgeted at $115,200, exclusive of depreciation These expenses will be paid in cash Depreciation is budgeted at $3,200 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 $7,700 will be purchased for cash during May g During May, the company will borrow $32,000 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 Prepare a cash budget for May (Any Repayments and Interest should be indicated by a minus sign ) 2 Prepare a budgeted income statement for May 3 Prepare a budgeted balance sheet as of May 31

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 17, 2024

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

MINDEN COMPANY Balance Sheet April 30
Assets
Cash	$	11,400
Accounts receivable, customers		57,000
Inventory		31,800
Buildings and equipment, net of depreciation		219,000

Total assets	$	319,200

Liabilities and Shareholders Equity
Accounts payable, suppliers	$	66,600
Note payable		15,700
Capital shares, no par		192,000
Retained earnings		44,900

Total liabilities and shareholders equity	$	319,200

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 $320,000 for May. Of these sales, $96,000 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 are collected in the following month. All of the April 30 receivables will be collected in May.
b.	Purchases of inventory are expected to total $192,000 during May. These purchases will all be on account. 40% 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 $64,000.
d.	Operating expenses for May are budgeted at $115,200, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,200 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 $7,700 will be purchased for cash during May.
g.	During May, the company will borrow $32,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.