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$11,100 Accounts receivable72,500 Inventory37,500 Buildings and equipment, net of depreciation238,000 Total assets$359,100 Liabilities and Stockholders' Equity Accounts payable$68,000 Note payable19,400 Common stock180,000 Retained earnings91,700 Total liabilities and stockholders' equity$359,100 The company is in the process of preparing a budget for May and has assembled the following data Sales are budgeted at $255,000 for May Of these sales, $76,500 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 Purchases of inventory are expected to total $189,000 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 The May 31 inventory balance is budgeted at $77,500 Selling and administrative expenses for May are budgeted at $93,600, exclusive of depreciation These expenses will be paid in cash Depreciation is budgeted at $6,250 for the month The note payable on the April 30 balance sheet will be paid during May, with $370 in interest (All of the interest relates to May ) New refrigerating equipment costing $8,600 will be purchased for cash during May During May, the company will borrow $29,500 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 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

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Posted on Jun 11, 2024

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$11,100

Accounts receivable72,500

Inventory37,500

Buildings and equipment, net of depreciation238,000

Total assets$359,100

Liabilities and Stockholders' Equity

Accounts payable$68,000

Note payable19,400

Common stock180,000

Retained earnings91,700

Total liabilities and stockholders' equity$359,100

The company is in the process of preparing a budget for May and has assembled the following data:

Sales are budgeted at $255,000 for May. Of these sales, $76,500 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.
Purchases of inventory are expected to total $189,000 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.
The May 31 inventory balance is budgeted at $77,500.
Selling and administrative expenses for May are budgeted at $93,600, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,250 for the month.
The note payable on the April 30 balance sheet will be paid during May, with $370 in interest. (All of the interest relates to May.)
New refrigerating equipment costing $8,600 will be purchased for cash during May.
During May, the company will borrow $29,500 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 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.