Modern Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below:

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

Sales are budgeted at $247,000 for May. Of these sales, $74,100 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 $172,000 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 $58,500.

Selling and administrative expenses for May are budgeted at $87,600, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,850 for the month.

The note payable on the April 30 balance sheet will be paid during May, with $400 in interest. (All of the interest relates to May.)

New refrigerating equipment costing $13,400 will be purchased for cash during May.

During May, the company will borrow $22,900 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: [8 marks]

Using the information provided, prepare the following:

1. The budgeted expected cash collections from customers for May. [2 marks]

2. The budgeted expected cash disbursements for merchandise purchases for May. [1 marks]

3. The cash budgeted for May. [5 marks]

Question 3 Modern Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: Modem Company Balance Sheet April 30 Assets Cash $14,500 72,750 Accounts receivable Inventory 31,750 Buildings and equipment, net of depreciation 209,000 Total assets $328,000 Liabilities and Stockholders' Equity $ 69,500 Accounts payable Note payable $16,000 Common stock 180,000 Retained earnings 62,500 Total liabilities and stockholders' equity $328,000 Total liabilities and stockholders' equity $328,000 The company is in the process of proparing a budget for May and has assembled the following data: Sales are bodgeted at $247,000 for May. Of these sales, $74,100 will be for cash; the remainder will be credit sales: One-half of a mooth'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 $172,000 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 $58,500. Selling and administrative expenses for May are budgeted at $87,600, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgetod at $6,850 for the month. The note payable on the April 30 balance sheet will be paid during May, with $400 in interest. (All of the interest relates to May) New refrigerating equipment costing $13,400 will be purchased for cash during May During May, the company will borrow $22.900 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: (8 marks] Using the information provided, prepare the following. 1. The budgeted expected cash collections from customers for May. [2 marks] 2. The budgeted expected cash disbursements for merchandise purchases for May (1 marks] 3. The cash budgeted for May (5 marks] For the toolbur, press ALT+10 (PC) or ALT-FN-F10 Mac *** BIVS Paragraph Arial 10pt E 6 I. X Required: [8 marks] Using the information provided, prepare the following: 1. The budgeted expected cash collections from customers for May. [2 marks] 2. The budgeted expected cash disbursements for merchandise purchases for May. [1 marks] 3. The cash budgeted for May. [5 marks] For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt