Minden Company is a wholesale distibutor of premium European chooolates. The com
ID: 2546047 • Letter: M
Question
Minden Company is a wholesale distibutor of premium European chooolates. The compeny's balance sheet as of April 30 is given below Balance Sheet Assets Cash $9.100 77,250 40,000 Buildings and equipment, net of depreciation Total assets S 365,360 Liablities and Stockholders Equity Accounts payable Note payable Common stock Retained earmings $ 79,750 2,300 180,000 93,300 Total labilities and stookholders' equity $ 365,350 The company is in the process of preparing a budget for May and has assembied the following data a. Sales are budgeted at $266,000 for May. Of these sales, $79,800 will be for cash; the remainder ill be aredit sales One-half of a month's credit sales are collected in the month the sales are made, and the emainder is ollected in the following month. All of the Apri 30 accounts receivable wil be colected in b. Punchanes ocount Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the folowing month. All of the Apri 30 accounts payable to suppliers will be paid during May C. The May 31 inventory balance is at $44,500 and administrative expenses for May are budgeted at $81.900, exclusive of depreciation. These d. Seling o. The note payable on the Apri 30 baiance sheet wil be paid during May, with $140 in interest All of the t New refrigeruting squpment costing $9 ,600 will be purchased for cash during May expenses will be paid in cash. Depreciation is budgeted at $6,450 for the month interest relates to May rom its bank by giving a new note payable to the bank for that amount. The new note will be due in one year Required cash MacBook Air
Explanation / Answer
Schedule of expected cash collections Cash Sales - May Collections On accounts Receivables 79800 April 30 balance 77250 May sales 93100 Total Cash Receipts 250150 Schedule of expected cash disbursments April 30 accounts payable balance 79750 May Purchase (170000*.4) 68000 Total Cash Payaments 147750 Minden Company Cash Budget For the month of May Beginning cash Balance 9100 Add: Collections from customers 250150 Total Cash Available 259250 Less Cash Disbursments Purchse of inventory 147750 Selling and administrative expense 81900 Purchase of equipment 9600 Total Cash Disbursments 239250 Excess of cash available over disbursments 20000 Financing Borrowing Note 23400 Repaying Note -12300 Interest 140 Total Financing 11240 Ending Cash Balance 31240 Minden Company Budgeted Income Statement For the month of May Sales 266000 Cost of goods sold Beginning Inventory 40000 Purchases 170000 Goods available for sale 210000 Ending Inventory 44500 Cost of goods sold 165500 Gross Margin 100500 Selling and administrative Expense (81900+6450) 88350 Net Operating Income 12150 Interest Expense 140 Net Income 12290 Minden Company Balance Sheet For the month of May Assets Cash 31240 Accounts Receivable 93100 Inventory 44500 Buildings and equipment , net of dep (239000+9600-6450) 242150 Total Assets 410990 Liabilities and Stockholder's Equity Accounts Payable (170000*.6) 102000 Note Payable 23400 Common stock 180000 Retained Earnnings (93300+12290) 105590 Total Liabilities 410990