4. value: 5.00 points Minden Company is a wholesale distributor of premium Europ

Question

4. value: 5.00 points 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 S 10,300 70,000 227,000 S 350,300 Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings S 86,000 180,000 61,300 Total liabilities and stockholders' equity 350,300 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $276,000 for May. Of these sales, $82,800 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 receivable will be collected in May. Purchases of inventory are expected to total $147,000 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. b. c. The May 31 inventory balance is budgeted at S43,000. d. Selling and administrative expenses for May are budgeted at $97,500, exclusive of depreciation e. The note payable on the April 30 balance sheet will be paid during May, with $235 in interest (AI of f. New refrigerating equipment costing $12,100 will be purchased for cash during May. These expenses will be paid in cash. Depreciation is budgeted at $3,200 for the month. the interest relates to May.) g. During May, the company will borrow $29,200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: 1-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash Minden Company Schedule of Expected Cash Collections Cash sales-May S 82,800 Collections on account receivable:

Explanation / Answer

SOLUTION

1A. Schedule of expected cash collections-

Schedule of expected cash disbursements-

1B. Cash Budget-

2. Income statement

3. Balance sheet

Amount ($) Cash sales 82,800 Collections on accounts receivable April 30 Balance 70,000 May Sales 96,600 Total cash receipts 249,400

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