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 30Assets Cash$ 9,400Accounts receivable78,500Inventory44,000Buildings and equipment, net of depreciation221,000Total assets$ 352,900Liabilities and Stockholders Equity Accounts payable$ 72,000Note payable19,700Common stock180,000Retained earnings81,200Total liabilities and stockholders equity$ 352,900

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

Sales are budgeted at $256,000 for May. Of these sales, $76,800 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.

Purchases of inventory are expected to total $188,000 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 $83,000.

Selling and administrative expenses for May are budgeted at $91,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4,000 for the month.

The note payable on the April 30 balance sheet will be paid during May, with $435 in interest. (All of the interest relates to May.)

New refrigerating equipment costing $7,000 will be purchased for cash during May.

During May, the company will borrow $23,100 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.

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 CompanyCash BudgetFor the Month of MayBeginning 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: Borrowingnote Repaymentsnote Interest Total financing Ending cash balance

Prepare a budgeted income statement for May.

Minden CompanyBudgeted Income StatementFor the Month of May

• Prepare a budgeted income statement for May.

Prepare a budgeted balance sheet as of May 31.

Minden CompanyBudgeted Balance SheetMay 31Assets Total assets Liabilities and Stockholders Equity Total liabilities and stockholders equity