. value: 10.00 points Minden Company is a wholesale distributor of premium Europ
ID: 2514405 • Letter: #
Question
. value: 10.00 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 Accounts receivable Inventory Buildings and equipment, net of depreciation $11,500 64,750 47,000 220,000 Total assets $ 343,250 Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings $70,750 19,900 180,000 72,600 Total liabilities and stockholders' equity $ 343,250 The company is in the process of preparing a budget for May and has assembled the following data a. Sales are budgeted at $290,000 for May. Of these sales, $87,000 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 is collected in the following month. All of the April 30 accounts receivable will be collected in b. Purchases of inventory are expected to total $210,000 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 expenses will be paid in cash. Depreciation is budgeted at $5,800 for the month interest relates to May.) During May, the company will borrow $23,700 from its bank by giving a new note payable to the bank for C. The May 31 inventory balance is budgeted at $79,500 d. Selling and administrative expenses for May are budgeted at 596,300, exclusive of depreciation. These e. The note payable on the April 30 balance sheet will be paid during May, with $450 in interest. (All of the f. New refrigerating equipment costing $7,600 will be purchased for cash during May g. that amount. The new note will be due in one year equired: 1-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchasesExplanation / Answer
1A Minden Company Schedule of Expected Cash Collection Cash Sales-May 87000 Collections of AR: April 30 Balance 64750 May Sales 101500 (290000-87000)*1/2 Total Cash Reciepts 253250 Minden Company Schedule of Expected Cash Disbursement April 30 Balance 70750 May Purchases 84000 210000*40% Total Cash Payments 154750 1B Minden Company Cash Budget For the Month of May Beginning Cash Balance 11500 Add: Collection from Customers 253250 Total Cash Available 264750 Less: Cash Disbursement: Purchase of Inventory 154750 Selling & Admin Expense 96300 Purchase of Equipment 7600 Total Cash Disbursement 258650 Excess of Cash Available over Disbursement 6100 Financing: Borrowing-Note 23700 Repayment-Note 19900 Interest 450 Total Financing 3350 Ending Cash Balance 9450 Minden Company Budgeted Income Statement For the Month of May Sales 290000 Cost of Goods Sold: Opening Inventory 47000 Add: Purchases during the month 210000 Total Available Inventory 257000 Less: Closing Inventory 79500 Cost of Goods Sold 177500 Gross Profit 112500 Selling & Admin Expense: Cash Expense 96300 Non Cash Expense(Depreciation) 5800 102100 Income Before Interest 10400 Less: Interest Expense 450 Net Income 9950 Minden Company Budgeted Balance Sheet May-31 Assets Explanation Cash 9450 Taken from above Account Recievables 101500 (290000-87000)*1/2 Inventory 79500 Given Buiding & Equipment, Net 221800 220000+7600-5800 Total Assets 412250 Liabilities and Stockholders Equity Account Payable 126000 (210000*60%) Note Payable 23700 Given Common Stock 180000 No Impact Retained Earning 82550 (72600+9950) Total Liabilities & Stockholders Equity 412250
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