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$1$

Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April $30$ is given below:

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{2\}\{|$l$|\}\{$Minden Company Balance Sheet April $30\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{2\}\{|$l$|\}\{$Assets$\}\backslash \backslash$

$\backslash$hline Cash & $\backslash$$ $16,700\backslash \backslash$

$\backslash$hline Accounts receivable & $75,500\backslash \backslash$

$\backslash$hline Inventory & $37,000\backslash \backslash$

$\backslash$hline Buildings and equipment, net of depreciation & $258,000\backslash \backslash$

$\backslash$hline Total assets & $\backslash$$ $387,200\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{2\}\{|$l$|\}\{$Liabilities and Stockholders, Equity$\}\backslash \backslash$

$\backslash$hline Accounts payable & $\backslash$$ $86,750\backslash \backslash$

$\backslash$hline Note payable & $15,700\backslash \backslash$

$\backslash$hline Common stock & $180,000\backslash \backslash$

$\backslash$hline Retained earnings & $104,750\backslash \backslash$

$\backslash$hline Total liabilities and stockholders' equity & $\backslash$$ $387,200\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Mc

Graw

$($H$)$II

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The company is in the process of preparing a budget for May and assembled the following data:

a$.$ Sales are budgeted at $\backslash (\backslash$$ $240,000\backslash )$ for May. Of these sales, $\backslash (\backslash$$ $72,000\backslash )$ 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 $30$ accounts receivable will be collected in May.

b$.$ Purchases of inventory are expected to total $\backslash (\backslash$$ $118,000\backslash )$ 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.

c$.$ The May $31$ inventory balance is budgeted at $\backslash (\backslash$$ $31,500\backslash ).$

d$.$ Selling and administrative expenses for May are budgeted at $\backslash (\backslash$$ $93,500\backslash ),$ exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $\backslash (\backslash$$ $2,400\backslash )$ for the month.

e$.$ The note payable on the April $30$ balance sheet will be paid during May, with $\backslash (\backslash$$ $160\backslash )$ in interest. $($All of the interest relates to May.$)$

f$.$ New refrigerating equipment costing $\backslash (\backslash$$ $15,000\backslash )$ will be purchased for cash during May.

g$.$ During May, the company will borrow $\backslash (\backslash$$ $26,600\backslash )$ from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. The new note will be due in one year.

Required:

$1.$ Calculate the expected cash collections from customers.

$2.$ Calculate the expected cash disbursements for merchandise purchases.

$3.$ Prepare a cash budget.

$4.$ Prepare a budgeted income statement.

$5.$ Prepare an end$-$of$-$month budgeted balance sheet.

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