MINDEN COMPANY Balance Sheet April 30 Assets Accounts receivable, customers Inve
ID: 2414235 • Letter: M
Question
MINDEN COMPANY Balance Sheet April 30 Assets Accounts receivable, customers Inventory Buildings and equipment, net of depreciation $15,400 62,000 34,800 239,000 Total assets $351 200 Liabilities and Shareholders' Equity Accounts payable, suppliers Note payable Capital shares, no par Retained earnings $ 72,600 17,700 212,000 48,900 Total liabilities and shareholders' equity $351 ,200 The company is in the process of preparing budget data for May. A number of budget items have already been prepared, as follows a. Sales are budgeted at $520,000 for May. Of these sales, $156,000 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 are collected in the following month. All of the April 30 receivables will be collected in May. b. Purchases of inventory are expected to total $312 ,000 during May. These purchases will all be on account, 40% 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 C. The May 31 inventory balance is budgeted at $104,000 d. Operating expenses for May are budgeted at $187 200, exclusive of depreciation. These expenses wil e. The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the f. New refrigerating equipment costing $9,700 will be purchased for cash during May be paid in cash. Depreciation is budgeted at $5,200 for the month interest relates to May.) g. Duing May, the company will borrow $52,000 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. Prepare a cash budget for May. (Any "Repayments" and "Interest" should be indicated by a minus MINDEN COMPANY Cash Budget For the Month Ended May 31 Cash balance, beginning Add: Receipts from customers Total cash available Deduct: Disbursements $15,400 400,000 415,400 Operating expenses Purchases of equipment 187 200 9700Explanation / Answer
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Cash Budget Cash Balance, Beginning $ 15,400 Add: Receipts from Customers(62000+156000+(520000-156000)/2) $ 400,000 Total Cash Available $ 415,400 Less: Disburesements Operating Expenses $ 187,200 Purchase of Equipment $ 9,700 Purchase of Inventory(312000*40%+72600) $ 197,400 Total Cash Disbursements $ 394,300 Excess of Receipts over disbursements $ 21,100 Financing: Borrowing(Note) $ 52,000 Repayment(Note) $ (17,700) Interest $ (100) Total Financing $ 34,200 Cash Balance, Ending $ 55,300
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