Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: Assets Minden Company Balance Sheet April 30 Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings Total liabilities and stockholders' equity $ 9,000 54,000 30,000 207,000 $ 300,000 $ 63,000 14,500 180,000 42,500 $ 300,000 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $200,000 for May. Of these sales, $60,000 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 $120,000 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 $40,000. d. Selling and administrative expenses for May are budgeted at $72,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,000 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 $6,500 will be purchased for cash during May. g. During May, the company will borrow $20,000 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. 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. Req 1 and 2 Required 3 Required 4 Required 5 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 Req 1 and 2 Required 3 Required 4 Required 5 Prepare a cash budget for May. (Cash deficiency, repaym Minden Company Cash Budget For the Month of May Beginning cash balance $ 9,000 Add collection from customers 210,000 Total cash available 219,000 Less cash disbursements: Purchase of inventory 123,000 Selling and administrative expenses 72,000 Purchases of equipment Total cash disbursements 195,000 Excess of cash available over disbursements 24,000 Financing: Borrowing-note Repayments-note 20,000 (14,500) Interest Total financing (100) 5,400 Ending cash balance $ 29,400 Req 1 and 2 Required 3 Required 4 Required 5 Prepare a budgeted income statement for May. Minden Company Budgeted Income Statement For the Month of May Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income $ 200,000 110,000 90,000 74,000 16,000 100 69 $ 15,900 Req 1 and 2 Required 3 Required 4 Required 5 Prepare a budgeted balance sheet as of May 31. Minden Company Budgeted Balance Sheet Cash May 31 Assets Accounts receivable Inventory Buildings and equipment, net of depreciation $ 19,260 64,000 40,000 211,500 Total assets $ 334,760 Liabilities and Stockholders' Equity Accounts payable $ 60,000 Note payable 20,000 Common stock 180,000 Retained earnings 78,400 Total liabilities and stockholders' equity $ 338,400