PROBLEM 2: CASH BUDGET PROBLEM (20 pts)

Milton Company is a chocolate wholesaler. The company presents the following information to the date of April 30

: Cash .. $ 9,000

Accounts receivable .. 54,000

Inventory .. 30,000

Building and equipment, net .. 207,000

Accounts payable $ 63,000

Note payable .. 14,500

Stock capital .. 180,000

Retained earnings 42,500

The company is in the process of preparing the budget for the month of May. Below are a series of items to prepare the cash budget:

1 Sales budgeted for May are $ 200,000. Of that item, 30% is charged at the moment and the remaining are credit sales. 50% of credit sales are charged in the month of sale and the remaining is charged in the following month. All accounts receivable as of April 30 are collected in May. 2 Inventory purchases are expected to be $ 120,000 in the month of May. All are on credit. 40% of purchases are paid in the month of purchase, the remainder in the following month. All accounts payable as of April 30 are paid in May. 3 The inventory balance as of May 31 budgeted is $ 40,000 4 Sales and administration expenses for May budgeted are $ 72,000. These expenses are paid in Cash. Depreciation is budgeted at a rate of $ 2,000 per month. 5 The Note Payable on April 30 will be paid in May, with an additional $ 100 of interest. 6 I bought a new device that cost $ 6,000 to be paid in cash in May. 7 In May, he takes a loan for $ 20,000 to the Bank by signing a note that expires in one year. Requirements: Prepare a Cash Budget for the month of May. Support this budget with the Schedule of Cash Collections from sales and Shedule of Cash Disbursements for merchandise purchases.