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 $ $11,400$

Accounts receivable $75,000$

Inventory $41,000$

Buildings and equipment, net of depreciation $224,000$

Total assets $ $351,400$

Liabilities and Stockholders$$ Equity

Accounts payable $ $70,000$

Note payable $15,500$

Common shares $180,000$

Retained earnings $85,900$

Total liabilities and stockholders$$ equity $ $351,400$

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

Sales are budgeted at $$220,000$ for May. Of these sales, $$66,000$ 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.

Purchases of inventory are expected to total $$128,000$ 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 $$56,000.$

Selling and administrative expenses for May are budgeted at $$86,000,$ exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $$6,750$ for the month.

The note payable on the April $30$ balance sheet will be paid during May, with $$565$ in interest. $($All of the interest relates to May.$)$

New refrigerating equipment costing $$6,700$ will be purchased for cash during May.

During May, the company will borrow $$25,300$ 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..

Schedule of expected cash flow collections

Cash sales$$ May:

Collections on accounts receivable:

April $30$ balance:

May sales:

Total cash receipts:

Schedule of Expected Cash Disbursements

April $30$ accounts payable balance:

May purchases:

Total cash payments:

$1-$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:

Add collections from customers:

Total cash available:

Less cash disbursements:

Purchase of inventory:

Selling and administrative expenses:

Purchases of equipment:

Total cash disbursements:

Excess of cash available over disbursements:

Financing

Borrowing$--$note:

Repayments$-$note:

Interest:

Total financing:

Ending cash balance:

$2.$ Prepare a budgeted Minden Company

Budgeted Income Statement

income statement for May.

Cost of goods sold

$3.$ Prepare a budgeted balance sheet as of May $31.$

Minden Company

Budgeted Balance Sheet

May $31$

Assets

Total assets

Liabilities and Shareholders' Equity

Total liabilities and shareholders' equity