1. Please prepare a budgeted income statement for May 2.Prepare a budgeted balan
ID: 2566142 • Letter: 1
Question
1. Please prepare a budgeted income statement for May
2.Prepare a budgeted balance sheet as of May 31
PROBLEM 8-17 Cash Budget; Income Statement; Balance Sheet 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 9,000 54,000 30,000 ash Accounts receivable ...._....___ ....___. . .._ _ . . . _.. Buildings and equipment, net of depreciation 207,000 __ _ _ . . . . . . . . . . .. Liabilities and Stockholders' Equity Note payable 42,500 Total liabilities and stockholders' equity . .. . . .. _ . . .. . . ._. . . ..$300,000Explanation / Answer
Minden Company Schedule of Expected Cash Collections Cash sales - May 60000 Collections on account receivable: April 30 balance 54000 May sales [($200000-$60000)/2] 70000 Total cash receipts 184000 Minden Company Schedule of Expected Cash Disbursements April 30 accounts payable balance 63000 May purchases ($120000 x 40%) 48000 Total cash payments 111000 Minden Company Cash Budget For the Month of May Beginning cash balance $ 9000 Add collections from customers 184000 Total cash available 193000 Less cash disbursements: Purchase of inventory 111000 Selling and administrative expenses 72000 Purchases of equipment 6500 Total cash disbursements 189500 Excess of cash available over disbursements 3500 Financing: Borrowing-note 20000 Repayments-note -14500 Interest -100 Total financing 5400 Ending cash balance $ 8900 Minden Company Budgeted Income Statement For the Month of May Sales revenue 200000 Cost of goods sold: Beginning inventory balance 30000 Add purchases 120000 Cost of goods available 150000 Ending inventory balance 40000 Cost of goods sold 110000 Gross profit 90000 Selling and administrative expense 72000 Depreciation expense 2000 Interest expense 100 74100 Net income $ 15900 Minden Company Budgeted Balance Sheet May 31 Assets Cash 8900 Accounts receivable 70000 Inventory 40000 Buildings and equipment, net of depreciation 211500 ($207000 + $6500 - $2000) Total assets $ 330400 Liabilities and Stockholders' Equity Accounts payable ($120000 x 60%) 72000 Note payable 20000 Common stock 180000 Retained earnings ($42500 + $15900) 58400 Total liabilities and stockholders' equity $ 330400
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