Minden Company is a wholesale distributor of premium European chocolates. The co

Question

Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of Apri 30 is given below Balance Sheet ??"h Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable s 11,500 64,750 47,000 220,000 s 343,250 $ 70,750 19,900 180,000 72, 600 Retained earnings Total liabilities 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 $290,000 for May. Of these sales, $87000 will be for cash, the remainder will be credit sales. One-half of a

Explanation / Answer

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1 Minden Company Schedule of Expected Cash Collections Cash sales - May 87000 Collections on account receivable: April 30 balance 64750 May sales [($290000-$87000)/2] 101500 Total cash receipts 253250 2 Minden Company Schedule of Expected Cash Disbursements April 30 accounts payable balance 70750 May purchases ($210000 x 40%) 84000 Total cash payments 154750 3 Minden Company Cash Budget For the Month of May Beginning cash balance $ 11500 Add collections from customers 253250 Total cash available 264750 Less cash disbursements: Purchase of inventory 154750 Selling and administrative expenses 96300 Purchases of equipment 7600 Total cash disbursements 258650 Excess of cash available over disbursements 6100 Financing: Borrowing-note 23700 Repayments-note -19900 Interest -450 Total financing 3350 Ending cash balance $ 9450

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