Minden Company is a wholesale distributor of premium European chocolates. The co
ID: 2508818 • 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 Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock $17,20e 8,000 48,258 284,888 $ 327,458 $ 67,800 16,200 188,800 64,250 $ 327,450 Retained earnings Total 1iabilities and stockholders' equity The company is in the process of preparing a budget for May and has assembled the following data 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. a. Sales are budgeted at $253,000 for May. Of these sales, $75.900 will be for cash; the remainder will be credit sales. One-half of a Next> K Prev 4 of 9Explanation / Answer
1-a) Schedule of Expected cash collection Cash sales-May 75,900 Collections on account receivable April 30 balance 58,000 May sales (253000-75900)*50% 88550 total cash recepits 222,450 Schedule of Expected cash disbursements April 30 accounts payable balance 67,000 May purchases (140,000*40%) 56000 total cash payments 123,000 1-b) Cash Budget Beginning cash balance 17,200 Add Collections from customers 222,450 total cash available 239,650 less Cash disbursements purchase of inventoru 123,000 selling and administrative expense 93,000 purchase of Equipment 11,100 total cash disbursements 227,100 Excess of cash available over disbursements 12,550 financing: borrowing -note 25,400 Repayments-note -16,200 interest -300 total financing 8,900 Ending cash balance 21,450 Budgeted income statement sales 253,000 cost of goods sold: beginning inventory 48,250 purchases 140,000 goods available for sale 188,250 ending invnetory 47,000 cost of goods sold: 141,250 Gross margin 111,750 Selling and administrative expesne 93,000 Depreciation expense 2,850 net operating income 15,900 interest expesne 300 net income 15,600 Budgeted balance sheet Assets Cash 21,450 Account receivable 88550 inventory 47,000 buildings & equipment,net of depreciaiton 212250 (204000+11,100-2850) total Assets 369,250 Laibilities & stockholder's Equity Accounts payable 84000 note payable 25,400 common stock 180,000 Retained earnings (64,250+15,600) 79,850 total liabilities & stockholders equity 369250