MidenCoan i a wholesale distributor of premium Europen chocolates. The company\'
ID: 2551568 • Letter: M
Question
MidenCoan i a wholesale distributor of premium Europen chocolates. The company's belance sheet s of Apni m European below 30 is gven Balance Sheet Apeil 30 Cash Accounts receivable IeventorY Buildings and equipment, set of depreciation Total assets 9,500 56,500 Liabilities and Stoekhoiders quity Accounts payable Sote payable Common stock Retained earninge s 353,250 79,000 180,000 353,25 Total liabilities and stockholders equity The company is in the process of preparing a budget for May and has assembled the following data: a Sales are budgeted at $299,000 for May. Of these sales, $89700 will be for cashc the remainder wil be credit sales. One-half of a month's credit sales are colected 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 $169,000 during May. These purchases will all be on account. Forty percent of al 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 $42,000 d. Selling and administrative expenses for May are budgeted at $89,700, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,250 for the month. e. The note payable on the April 30 balance sheet will be pald during May, with $320 in interest. (All of the interest relates to May f. New refrigerating equipment costing $7,200 will be purchased for cash during May g. During May, the company will borrow $25,200 from its bank by gving a new note payable to the bank for that amount. The new note will be due in one yearExplanation / Answer
M company Schedule of cash collections Particulars Amount Amount cash sales 89700 collection of accounts receivable 56500 cash from may credit sales ((294000-88200)/2) 104650 Total cash receipts 250850 Schedule of cash disbursements Particulars Amount Amount payment of outstanding balance 79000 payment of may credit purchases (169000*40%) 67600 Total Cash disbursements 146600 M company cash Budget for the month of May Particulars Amount Amount Beginning cash balance 9500 Add: cash collection 250850 Total cash available 260350 Less: Cash disbursements For merchandise 146600 For selling and administrative expenses 89700 For equipment 7200 Total cash disbursements 243500 Excess ( deficiency) of cash 16850 Financing Borrowing 25200 repayment -20000 Interest -320 Ending cash balance 21730 M company Budgeted Income Statement For the month ended May Particluars Amount Budgeted sales 299000 less:cost of goods sold (53250+169000-42000) 180250 Gross profit 118750 less: Selling and adminisrative expenses 89700 Depreciation 2250 Interest 320 Net Income 26480 M company Budgeted Balance Sheet As at May 31 Particluars Amount Current Assets: Cash 21730 Accounts receivable 104650 Inventory 42000 Total Current Assets 168380 Add:Building equipment, net (234000+7200-2250) 238950 Total Assets 407330 Labilities and Equity Accounts payable (169000*60%) 101400 Notes Payable 25200 Capital Stock 180000 Retained earnings (74250+26480) 100730 Total Liabilities and stockholders equity 407330