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Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April

$30$

$$is given below?

$15$

points

MINDEN COMPANY

Balance Sheet

April

$30$

Assets

Cash

Accounts receivable

Inventory

Buildings and equipment, net of depreciation

Total assets

$

$10$

$,$

$500$

$57$

$,$

$000$

$42$

$,$

$500$

$236$

$,$

$000$

$

$346$

$,$

$000$

Liabilities and Stockholders' Equity

Accounts payable

Note payable

Common shares

Retained earnings

Total liabilities and stockholders' equity

$

$72$

$,$

$750$

$21$

$,$

$200$

$180$

$,$

$000$

$72$

$,$

$050$

$

$346$

$,$

$000$

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

a

$.$

$$Sales are budgeted at $

$296$

$,$

$000$

$$for May. Of these 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 receivable 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 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 $

$51$

$,$

$500$

$.$

d

$.$

$$Selling and administrative expenses for May are budgeted at $

$98$

$,$

$700$

$,$

$$exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $

$2$

$,$

$150$

$$for the month.

e

$.$

$$The note payable on the April

$30$

$$balance sheet will be paid during May, with $

$220$

$$in interest.

$($

All of the interest relates to May.

$)$

$$f New refrigerating equipment costing $

$6$

$,$

$800$

$$will be purchased for cash during 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. Required:

$1$

$-$

a

$.$

$$Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases.

$15$

polints

Schedule of Expected Cash Collections

Cash sales

$-$

May

Collections on account receivable:

April

$30$

$$balance

May sales

Total cash receipts

Schedule of Expected Cash Disbursements

April

$30$

$$accounts payable balance

May purchases

Total cash payments

$1$

$-$

b

$.$

$$Prepare a cash budget for May.

$($

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

$2$

$.$

$$Prepare a budgeted income statement for May. Minden Company

Budgeted Income Statement

For the Month of May

Cost of goods sold:

$3$

$.$

$$Prepare a budgeted balance sheet as of May

$31$

$.$

Minden Company

Budgeted Balance Sheet

May

$31$

Assets

Total assets

Liabilities and Shareholders Equity

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