Required: $1.$ Prepare a schedule of expected cash collections from sales.

Prepare a schedule of expected cash disbursements for merchandise purchases.

Prepare a cash budget for May. $($Cash deficiency, repayments and interest should be indicated by a

minus sign.$)$

Prepare a budgeted income statement for May.

Prepare a budgeted balance sheet as of May $31.$

QUESTION Kitkatil Company is a wholesale distributor of premium European chocolates. The

company's balance sheet as of April $30$ is given below: KITKATIL COMPANY Balance Sheet April $30$

Assets Cash $ $15,100$ Accounts receivable $74,750$ Inventory $51,750$ Buildings and equipment, net of

depreciation $233,000$ Total assets $$374,600$ Liabilities and Stockholders' Equity Accounts payable $

$74,000$ Note payable $11,500$ Common shares $180,000$ Retained earnings $109,100$ Total liabilities and

stockholders' equity $$374,600$ The company is in the process of preparing a budget for May and has

assembled the following data: a$.$ Sales are budgeted at $$275,000$ for May. Of these sales, $$82,500$ 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. b$.$ Purchases of inventory are expected to total

$$214,000$ 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. c$.$ The May $31$ inventory balance is budgeted

at $$87,000.$ d$.$ Selling and administrative expenses for May are budgeted at $$81,300,$ exclusive of

depreciation. These expenses will be paid in cash. Depreciation is budgeted at $$2,750$ for the month.

e$.$ The note payable on the April $30$ balance sheet will be paid during May, with $$585$ in interest. $($All

of the interest relates to May.$)$ f$.$ New refrigerating equipment costing $$10,800$ will be purchased for

cash during May. g$.$ During May, the company will borrow $$20,800$ from its bank by giving a new note

payable to the bank for that amount. The new note will be due in one year.