Please help with requirements one through five. Minden Company is a wholesale di
ID: 2508522 • Letter: P
Question
Please help with requirements one through five. Minden Company is a wholesale distributor of premium European chocolates. The c below: l ompany's balance sheet as of April 30 is given ril 30 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets s 11,500 64,750 47,000 220,000 343,250 Liabilities and Stockholders' Equity Accounts payable Note payable s 70,750 19,900 180,000 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 recelvable 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 $7600 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. Pre 5 of 5 Next>Explanation / Answer
minden company Schedule of expected cash collections Cash Sales - May Collections On accounts Receivables 87000 April 30 balance 64750 May sales 101500 Total Cash Receipts 253250 Schedule of expected cash disbursments April 30 accounts payable balance 70750 May Purchase 210000*40% 84000 Total Cash Payaments 154750 1-a. Schedule of cash receipts: Collections on account receivable for May sales = (290000-87000) = 50% × $203,000 = $101,500 Minden Company Cash Budget For the month of May Beginning cash Balance 11500 Add: Collections from customers 253250 Total Cash Available 264750 Less Cash Disbursments Purchse of inventory 154750 Selling and administrative expense 96300 Purchase of equipment 7600 Total Cash Disbursments 258650 Excess of cash available over disbursments 6100 Financing Borrowing Note 23700 Repaying Note -19900 Interest -450 Total Financing 3350 Ending Cash Balance 9450 Minden Company Budgeted Income Statement For the month of May Sales 290000 Cost of goods sold Beginning Inventory 47000 Purchases 210000 Goods available for sale 257000 Ending Inventory 79500 Cost of goods sold 177500 Gross Margin 112500 Selling and administrative Expense (96300+5800) 102100 Net Operating Income 10400 Interest Expense -450 Net Income 9950 Minden Company Balance Sheet For the month of May Assets Cash 9450 Accounts Receivable 101500 Inventory 79500 Buildings and equipment , net of dep (220000+7600-5800) 221800 Total Assets 412250 Liabilities and Stockholder's Equity Accounts Payable (210000*0.6) 126000 Note Payable 23700 Common stock 180000 Retained Earnnings (72600+10850) 82550 Total Liabilities 412250