Problem $8-19($Algo$)$ Cash Budget; Income Statement; Balance Sheet $[$LO$8-2,$ LO$8-4,$ LO$8-8,$ LO$8-9,$ LO$8-10]$

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 $ $14,500$

Accounts receivable $72,750$

Inventory $31,750$

Buildings and equipment, net of depreciation $209,000$

Total assets $ $328,000$

Liabilities and Stockholders$$ Equity

Accounts payable $ $69,500$

Note payable $16,000$

Common stock $180,000$

Retained earnings $62,500$

Total liabilities and stockholders$$ equity $ $328,000$

The company is in the process of preparing a budget for May and 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 are 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 $$385$ 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:

For May:

Calculate the expected cash collections from customers.

Calculate the expected cash disbursements for merchandise purchases.

Prepare a cash budget.

Prepare a budgeted income statement.

Prepare an end$-$of$-$month budgeted balance sheet.

$1.$ 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

Required $3.$

Prepare a cash budget for May.

Note: 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

Required $4.$

Required $1$ and $2$

Required $3$

Required $4$

Required $5$

Prepare a budgeted income statement for May.

$\backslash$table$[[$Minden Company$],[$Budgeted Income Statement,$],[$For the Month of May,$],[,],[,]]$

Required $5.$

Prepare an end$-$of$-$month budgeted balance sheet as of May $31.$

Minden Company

Budgeted Balance Sheet

May $31$

Assets

Total assets

Liabilities and Stockholders$$ Equity

Total liabilities and stockholders$$ equity