Minden Company is a wholesale distributor of premium European chocolates The companys balance sheet as of April 30 is given below Minden Company Balance Sheet April 30 Assets Cash $ 9,100 Accounts receivable 77,250 Inventory 40,000 Buildings and equipment, net of depreciation 239,000 Total assets $ 365,350 Liabilities and Stockholders Equity Accounts payable $ 79,750 Note payable 12,300 Common stock 180,000 Retained earnings 93,300 Total liabilities and stockholders equity $ 365,350 The company is in the process of preparing a budget for May and has assembled the following data Sales are budgeted at $266,000 for May Of these sales, $79,800 will be for cash the remainder will be credit sales One half of a months 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 Inventory purchases are expected to total $170,000 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 $44,500 Selling and administrative expenses for May are budgeted at $81,900, exclusive of depreciation These expenses will be paid in cash Depreciation is budgeted at $6,450 for the month New refrigerating equipment costing $9,600 will be purchased for cash during May The note payable on the April 30 balance sheet will be paid during May, with $140 in interest (All of the interest relates to May ) During May, the company will borrow $23,400 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 ( Hint In the financing section, make sure to denote cash outflows as negative numbers In the cash disbursements section, the cash outflows should be written as positive numbers I know this seems counterintuitive accountants tend to write costs as positive numbers if they are listed in a section of the financial statements that is already labeled as costs or expenses or disbursements because then you know they are all outflows But in a section where inflows and outflows are mixed, like in the financing section, they make the outflows negative numbers ) 4 Prepare a budgeted income statement for May ( Hint here, the interest payment will have a positive sign Another hint Remember from ACTG 211 that Cost of Goods Sold beginning inventory account balance inventory purchase cost ending inventory account balance ) 5 Prepare a budgeted balance sheet as of May 31 ( Hint You won't need every line on the worksheet There should be four 'asset' items and four 'liability and owners' equity' items, matching the categories in the beginning balance sheet above Another hint Remember from ACTG 211 that Buildings and Equipment, net of depreciation is increased every month by any new building or equipment purchases, and decreased by any depreciation May depreciation is given in part d above )

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Minden Company is a wholesale distributor of premium European chocolates. The companys balance sheet as of April 30 is given below: Minden Company Balance Sheet

Minden Company is a wholesale distributor of premium European chocolates. The companys balance sheet as of April 30 is given below:

Minden Company Balance Sheet April 30
Assets
Cash	$ 9,100
Accounts receivable	77,250
Inventory	40,000
Buildings and equipment, net of depreciation	239,000
Total assets	$ 365,350
Liabilities and Stockholders Equity
Accounts payable	$ 79,750
Note payable	12,300
Common stock	180,000
Retained earnings	93,300
Total liabilities and stockholders equity	$ 365,350

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

Sales are budgeted at $266,000 for May. Of these sales, $79,800 will be for cash; the remainder will be credit sales. One-half of a months 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.
Inventory purchases are expected to total $170,000 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 $44,500.
Selling and administrative expenses for May are budgeted at $81,900, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,450 for the month.
New refrigerating equipment costing $9,600 will be purchased for cash during May.
The note payable on the April 30 balance sheet will be paid during May, with $140 in interest. (All of the interest relates to May.)
During May, the company will borrow $23,400 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. (Hint: In the financing section, make sure to denote cash outflows as negative numbers. In the cash disbursements section, the cash outflows should be written as positive numbers. I know this seems counterintuitive - accountants tend to write costs as positive numbers if they are listed in a section of the financial statements that is already labeled as "costs" or "expenses" or "disbursements" because then you know they are all outflows. But in a section where inflows and outflows are mixed, like in the financing section, they make the outflows negative numbers.)

4. Prepare a budgeted income statement for May. (Hint: here, the interest payment will have a positive sign. Another hint: Remember from ACTG 211 that Cost of Goods Sold = beginning inventory account balance + inventory purchase cost - ending inventory account balance.)

5. Prepare a budgeted balance sheet as of May 31. (Hint: You won't need every line on the worksheet. There should be four 'asset' items and four 'liability and owners' equity' items, matching the categories in the beginning balance sheet above. Another hint: Remember from ACTG 211 that "Buildings and Equipment, net of depreciation" is increased every month by any new building or equipment purchases, and decreased by any depreciation. May depreciation is given in part d above.)