Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below. Minden Company Balance Sheet April 30 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Coron stock Retained earnings Total liabilities and stockholders' equity 9.200 76,250 49,750 228.000 363,200 63,750 23,900 180,000 95,550 363,200 $ The company is in the process of preparing a budget for May and has assembled the following data: a Sales are budgeted at $227000 for May. Of these sales. 568.100 will be for cash; the remainder will be credit sales. One-half of a month's 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 $159.000 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 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 $87,500. d. Selling and administrative expenses for May are budgeted at $79,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,000 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $105 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $11,800 will be purchased for cash during May. g. During May, the company will borrow $25,100 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. 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 4. Prepare a budgeted income statement for May 5. Prepare a budgeted balance sheet as of May 31. 1. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. Total cash collections Total cash disbursements Prepare a cash budget for May. (Cash deficiency, repayments and Minden Company Cash Budget For the Month of May Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Purchase of inventory Selling and administrative expenses Purchases of equipment Total cash disbursements Excess of cash available over disbursements Financing Borrowing-note Repayments-note Interest Total financing Ending cash balance Prepare a budgeted income statement for May. Minden Company Budgeted Income Statement For the Month of May Sales $ Cost of goods sold (Gross margin 227,000 121,250 105,750 79.500 26.250 Selling and administrative expenses Interest expense Net income 105 26.145 Prepare a budgeted balance sheet as of May 31. Minden Company Budgeted Balance Sheet May 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation $ 15,445 79,450 7,500 233,800 8 416,195 Total assets S Liabilities and Stockholders' Equity PAccounts payable s Note payable Common stock Retained earnings 95.400 25,100 180.000 115.695 Total liabilities and stockholders' equity 416 195
