Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet on April...

Transcribed Image Text:

Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet on April 30 is as follows: MINDEN COMPANY Balance Sheet April 30 Assets Cash Accounts receivable, customers Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Shareholders' Equity Accounts payable, suppliers Note payable Capital shares, no par Retained earnings Total liabilities and shareholders' equity $ 11,800 57,500 32,100 221,000 $322,400 $ 67,200 15,900 194,000 45,300 $322,400 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 $340,000 for May. Of these sales, $102,000 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. 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 $340,000 for May. Of these sales, $102,000 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 $204,000 during May. These purchases will all be on account. 30% 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 $68,000. d. Operating expenses for May are budgeted at $122,400, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,400 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $110 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $7,900 will be purchased for cash during May. g. During May, the company will borrow $34,000 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 sign.) MINDEN COMPANY Cash Budget For the Month Ended May 31 Total cash available Deduct: Disbursements: Total cash disbursements Excess of receipts over disbursements Financing: 0 0 Total cash available MINDEN COMPANY Cash Budget For the Month Ended May 31 Deduct: Disbursements: Total cash disbursements Excess of receipts over disbursements Financing: Total financing 0 0 2. Prepare a budgeted income statement for May. Cost of goods sold: Goods available for sale Cost of goods sold MINDEN COMPANY Budgeted Income Statement For the Month Ended May 31 3. Prepare a budgeted balance sheet as of May 31. Total assets MINDEN COMPANY Budgeted Balance Sheet as of May 31 Assets Liabilities and Shareholders' Equity Total liabilities and shareholders' equity $ 0 69 Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet on April 30 is as follows: MINDEN COMPANY Balance Sheet April 30 Assets Cash Accounts receivable, customers Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Shareholders' Equity Accounts payable, suppliers Note payable Capital shares, no par Retained earnings Total liabilities and shareholders' equity $ 11,800 57,500 32,100 221,000 $322,400 $ 67,200 15,900 194,000 45,300 $322,400 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 $340,000 for May. Of these sales, $102,000 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. 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 $340,000 for May. Of these sales, $102,000 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 $204,000 during May. These purchases will all be on account. 30% 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 $68,000. d. Operating expenses for May are budgeted at $122,400, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,400 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $110 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $7,900 will be purchased for cash during May. g. During May, the company will borrow $34,000 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 sign.) MINDEN COMPANY Cash Budget For the Month Ended May 31 Total cash available Deduct: Disbursements: Total cash disbursements Excess of receipts over disbursements Financing: 0 0 Total cash available MINDEN COMPANY Cash Budget For the Month Ended May 31 Deduct: Disbursements: Total cash disbursements Excess of receipts over disbursements Financing: Total financing 0 0 2. Prepare a budgeted income statement for May. Cost of goods sold: Goods available for sale Cost of goods sold MINDEN COMPANY Budgeted Income Statement For the Month Ended May 31 3. Prepare a budgeted balance sheet as of May 31. Total assets MINDEN COMPANY Budgeted Balance Sheet as of May 31 Assets Liabilities and Shareholders' Equity Total liabilities and shareholders' equity $ 0 69