Question

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 $ 11,500 Accounts receivable 64,750 Inventory 47,000 Buildings and equipment, net of depreciation 220,000 Total assets $ 343,250 Liabilities and Stockholders’ Equity Accounts payable $ 70,750 Note payable 19,900 Common stock 180,000 Retained earnings 72,600 Total liabilities and stockholders’ equity $ 343,250 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $290,000 for May. Of these sales, $87,000 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 $210,000 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 $79,500. d. Selling and administrative expenses for May are budgeted at $96,300, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,800 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $450 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $7,600 will be purchased for cash during May. g. During May, the company will borrow $23,700 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Answer 1

Answer:

You didn't post the questions. After an online research I found'em on the web. Hope they are useful.

The answer and procedures of the exercise are attached in a microsoft excel document.  

Explanation:

The questions I found:

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

1. b. Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

2. Prepare a budgeted income statement for May.

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

Answer 2

1. a. The preparation of the schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases are as follows:

Schedule of expected cash collections

Cash Sales                                    $87,000

Accounts receivable                      64,750

Credit Sales                                   101,500 ($203,000/2)

Total cash collected in May = $253,250

Schedule of expected cash disbursements for merchandise:

40% of purchases           $84,000

Accounts payable             70,750

Total cash payments   $154,750

1. b. The preparation of a cash budget for May for Minden Company is as follows:

Cash Budget for May

Beginning Cash                                     $11,500

Cash receipts                                       253,250

Note Payable                                         23,700

Total cash available                         $288,450

Cash disbursements:

Merchandise                   $154,750

Selling and
administrative expenses 96,300

Note payable                    20,350

Refrigerator                         7,600 ($279,000)

Ending cash balance                         $9,450

2. The preparation of a budgeted income statement for May for Minden Company is as follows:

Sales Revenue                                  $290,000

Cost of goods sold:

Beginning inventory $47,000

Purchases                  210,000

Ending inventory       (79,500)          $177,500

Budgeted Gross Profit                      $112,500

Expenses:

Selling & administrative expenses  $96,300

Interest expense                                      450

Depreciation                                         5,800

Total expenses                              $102,550

Budgeted net income                     $9,950

Budgeted net income          $9,950

Retained earnings                72,600

Ending retained earnings $82,550

3. The preparation of a budgeted balance sheet as of May 31 for Minden Company is as follows:

Minden Company

Balance Sheet

April 30

Assets

Cash                                                                         $9,450

Accounts receivable                                              101,500

Inventory                                                                 79,500

Buildings and equipment, net of depreciation   221,800 ($220,000 + $7,600 - $5,800)

Total assets                                                        $412,250

Liabilities and Stockholders’ Equity

Accounts payable                                             $105,000

Note payable                                                        23,700

Common stock                                                   180,000

Retained earnings                                               82,550

Suspense                                                              21,000

Total liabilities and stockholders’ equity    $412,250

Data and Calculations:

Minden Company

Balance Sheet

April 30

Assets

Cash $ 11,500

Accounts receivable 64,750

Inventory 47,000

Buildings and equipment, net of depreciation 220,000

Total assets $ 343,250

Liabilities and Stockholders’ Equity

Accounts payable $ 70,750

Note payable 19,900

Common stock 180,000

Retained earnings 72,600

Total liabilities and stockholders’ equity $ 343,250

a) Budgeted Sales =$290,000

Cash Sales = $87,000

Credit Sales = $203,000 ($290,000 - $87,000)

Cash collected in May:

Cash Sales = $87,000

Accounts receivable 64,750

Credit Sales = $101,500 ($203,000/2)

Total cash collected in May = $253,250 ($87,000 + $64,700 + $101,500)

Accounts Receivable:

Beginning balance   $64,750

Credit sales              203,000

Cash collections      (166,250)

Ending balance       $101,500

b) Budgeted Purchases = $210,000

Cash payment for purchases in May:

40% = $84,000

Accounts payable $ 70,750

Total cash payment for purchases in May = $154,750

Accounts Payable:

Beginning balance    $70,750

Credit Purchases       210,000

Cash payments         (175,750) ($70,750 + $105,000)

Ending balance       $105,000

c) Ending inventory = $79,500

d) Selling and administrative expenses = $96,300

Depreciation = $5,800

e) Cash payment for note payable = $20,350 ($19,900 + $450)

f) Purchase of Refrigerator = $7,600

g) Note Payable = $23,700

Question Completion:

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

1. b. Prepare a cash budget for May. (Cash deficiency, repayments, and interest should be indicated by a minus sign.)

2. Prepare a budgeted income statement for May.

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

Learn more about preparing the cash budget at https://brainly.com/question/16346203