Minden Company is a wholesale distributor of premium European chocolates. The co
ID: 2461829 • Letter: M
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 Accounts receivable Inventory Buildings and equipment, net of depreciation $ 12,700 66,500 48,500 229,000 Total assets $ 356,700 Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings $67,500 19,100 180,000 90,100 Total liabilities and stockholders' equity $356,700 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $262,000 for May. Of these sales, $78,600 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 b. Purchases of inventory are expected to total $196,000 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 $84,000 d. Selling and administrative expenses for May are budgeted at $87,300, exclusive of depreciation. These e. The note payable on the April 30 balance sheet will be paid during May, with $550 in interest. (All of the f. New refrigerating equipment costing $13,000 will be purchased for cash during May expenses will be paid in cash. Depreciation is budgeted at $6,400 for the month interest relates to May.) g. During May, the company will borrow $28,900 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 1-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases Minden Company Schedule of Expected Cash Collections Cash sales-May Collections on account receivable: April 30 balance May sales Total cash receipts 0Explanation / Answer
Part 4
Cost of goods sold = opening purchases + purchases - Ending inventory
=48500+196000-84000
= $ 160500
Part 1 Schedule of expected cash collections from sales Cash sales 78600 Collections on accounts receivable April 30 balances 66500 262000 May Sales ( 262000-78600)/2 92600 76800 185200 Total 237700 92600 Part 2 April 30 accounts payable balance 67500 May Purchases ( 40% of 196000) 78400 Total Cash Payments 145900 Part 3 Beginning cash balance 12700 Add collection from customers 237700 Total cash available 250400 Less Cash disbursement Purchase of inventory 145900 Selling and administrative exp 87300 Purchase of equipment 13000 Total cash disbursement 246200 Excess of cash over disbursement 4200 Financing note 28900 Repayment note Interest 550 Total Financimg 29450 Ending cash balance 33650Part 4
Cost of goods sold = opening purchases + purchases - Ending inventory
=48500+196000-84000
= $ 160500