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 stock Retained earnings Total liabilities and stockholders' equity 18,500 58,500 40,750 282,280 $319,750 67,750 15,800 180.000 56,200 319,750 $ The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $263,000 for May of these sales, $78,900 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 $193.000 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 $63,000. d. Selling and administrative expenses for May are budgeted at $73,200, exclusive or depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4,650 for the month. e. The note payable on the Apr 30 balance sheet will be paid during May, with $210 in interest. (All of the interest relates to May New refrigerating equipment costing $11,900 will be purchased for cash during May. g. During May, the company will borrow $27.200 from its bank by giving a new note payable to the bank for that amount. The new 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. Total cash collections Total cash disbursements 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 Add collections from customers Total cash available Less cash disbursem Purchase of in Selling and ad ve expenses Purchases of Total cash disburs Excess of cash available over disburseme Financing Borrowing hotel 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 Prepare a budgeted balance sheet as of May 31. Minden Company Budgeted Balance Sheet May 31 Assets Total assets Liabilities and Stockholders' Equity Total liabilities and stockholders' equity
