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Please help me answer these questions Minden Company is a wholesale distributor of premium European chocolates. The companys balance sheet as of April 30 is

Please help me answer these questions

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 $ 9,000
Accounts receivable 54,000
Inventory 30,000
Buildings and equipment, net of depreciation 207,000
Total assets $ 300,000
Liabilities and Stockholders Equity
Accounts payable $ 63,000
Note payable 14,500
Common stock 180,000
Retained earnings 42,500
Total liabilities and stockholders equity $ 300,000

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

Sales are budgeted at $220,000 for May. Of these sales, $60,000 will be for cash; the remainder will be credit sales. Each months credit sales are collected 60% in the month of sale and 40% in the month following the sale. All of the April 30 accounts receivable will be collected in May.

Purchases of inventory are expected to total $120,000 during May. These purchases will all be on account. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining 50% in the month following the purchase. All of the April 30 accounts payable to suppliers will be paid during May.

The May 31 inventory balance is budgeted at $40,000.

Selling and administrative expenses for May are budgeted at $72,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,000 for the month.

The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the interest relates to May.)

New refrigerating equipment costing $6,500 will be purchased for cash during May.

During May, the company will borrow $20,000 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:

For May:

  1. Calculate the expected cash collections.
  2. Calculate the expected cash disbursements for merchandise purchases.
  3. Prepare a cash budget.
  4. Prepare a budgeted income statement.
  5. Prepare an end-of-month budgeted balance sheet.

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