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 Common shares Retained earnings Total liabilities and stockholders' equity $ 11,500 64,750 47,000 220,000 $343,250 $ 70,750 19,900 180,000 72,600 $343,250 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $290,000 for May. Of these sales, $87,000 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 $210,000 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 $79,500. d. Selling and administrative expenses for May are budgeted at $96,300, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,800 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $450 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $7,600 will be purchased for cash during May. g. During May, the company will borrow $23,700 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-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases.. Required: 1-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases.. Schedule of Expected Cash Collections Cash sales-May Collections on account receivable: April 30 balance May sales Total cash receipts $ 870,000 64,750 101,500 $ 1,036,250 Schedule of Expected Cash Disbursements April 30 accounts payable balance May purchases Total cash payments $ 70,750 84,000 $ 154,750 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 $ 11,500 Add collections from customers 253,250 Total cash available 264,750 Less cash disbursements: Purchase of inventory 154,750 Selling and administrative expenses 98,300 Purchases of equipment 7,800 Total cash disbursements 258,650 Excess of cash available over disbursements 6,100 Financing: Borrowing-note 23,700 Repayments-note Interest (19,900) (450) Total financing 3,350 Ending cash balance $ 9,450 2. Prepare a budgeted income statement for May. Sales Cost of goods sold: Cost of goods sold Minden Company Budgeted Income Statement For the Month of May $ 177,500 Cost of goods sold Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income 177,500 $ 290,000 177,500 112,500 102,100 10,400 450 $ 9,950 3. Prepare a budgeted balance sheet as of May 31. Minden Company Budgeted Balance Sheet Cash Accounts receivable Inventory May 31 Assets Buildings and equipment, net of depreciation $ 9,450 101,500 79,500 221,800 $ 412,250 Total assets Liabilities and Shareholders' Equity Accounts payable $ 126,000 Note payable 23,700 180,000 Common shares 82,550 Retained earnings Total liabilities and shareholders' equity $ 412,250