Refer to the data for Minden Company in Problem 8-19. The company is considering making the following changes to the assumptions underlying its master budget:
1. Sales are budgeted for $220,000 for May.
2. Each month's credit sales are collected 60% in the month of sale and 40% in the month following the sale.
3. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining 50% in the month following the purchase.
All other information from Problem 8-19 that is not mentioned above remains the same.
Required:
Using the new assumptions described above, complete the following requirements:
1. Calculate the expected cash collections for May.
2. Calculate the expected cash disbursements for merchandise purchases for May.
3. Prepare a cash budget for May.
4. Using Schedule 9 as your guide, prepare a budgeted income statement for May.
5. Prepare a budgeted balance sheet as of May 31.