Problem 8-17 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10]

Problem 8-17 Cash Budget Income Statement, Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-1o] Minden Company is a wholesale distributor of premium European chocolates. The company's balanoe sheet as ofApril 30 is given below. Minden Company Balance Sheet April 30 Assets S 10,500 57,000 42,500 238,000 Cash Accounts receiva ble Buildings and equipment, net of depreciation Total assets S 348,000 Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings $ 72,750 21,200 180,000 72,050 Total liabilities and stockholders equity 5 346,000 The company is in the process of preparing a budgetfor May and has assembled the following data: a. Sales are budgeted at $298,000 for May Ofthese sales, $88,800 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 reoeivable will be collected in May b. Purchases of inventory are expected to total $192,000 during May. These purchases will all be on account. Forty peroentofall 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 balanoe is budgeted at $51,500 c. d. Selling and administrative expenses for May are budgeted at $98,700, exclusive ofdepreciation. These e. The note payable on the April 30 balanoe sheet will be paid during May, with $220 in interest. (All of the f. New refrigerating equipment costing $8,800 will be purchased for cash during May expenses will be paid in cash. Depreciation is budgeted at $2,150 for the month interest relates to May) g During May,the company will borrow $23 200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year