Question

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 $ 16,500 67,000 32,000 249,000 Total assets $364,600 Liabilities and Shareholders' Equity Accounts payable Note payable Common shares Retained earnings $ 68,750 20,500 180,000 95,250 Total liabilities and shareholders' equity $364,500

Answer 1

Answer to 1(a)
Schedule of Expected Cash Collection
Description	Amount (in $)
Cash Sale-May	72,300
Collection on Accounts Receivable	67,000
April 30 balance	16,500
May Sales	84,350
Total cash Receipts	2,40,150
Schedule of Expected Cash Disbursements for Merchandise Purchases
Description	Amount (in $)
April 30 Accounts Payable balance	68750
May Purchases	76400
Total Cash Payments	1,45,150
Answer to 1 (b)
Minden Company
Cash Budget
For the month of May
Description	Amount (in $)
Beginning Cash Balance	16,500
Add: Collection from Customers	2,23,650
Total Cash available	2,40,150
Less: Cash Disbursements
Purchase of Inventory	-1,45,150
Selling and Administrative expenses	-76,200
Purchase of equipment	-6,600
Total cash disbursements	-2,27,950
Excess of cash available over disbursements	12,200
Financing
Borrowing note	27,000
Repayment note	-20,500
Interest	-170
Total Financing	6,330
Ending cash balance	18,530
Answer to 2.
Budgeted Income Statement
For the month of May
Sales	241000
Inventory in hand in May	86000
Less: Purchases	-191000
Opening Inventory	-32000
Gross Profit	104000
Less: Expenses
Selling & Administrative	-76200
Interest	-170
Depreciation	-5300
Net Profit	22330
Answer to 3.
Minden Company
Budgeted Balance Sheet as on May 31
Description	Amount (in $)	Amount (in $)
Assets
Cash		18530
Accounts Receivable		84350
Inventory		86000
Buildings & Equipments(net of depreciation)
Opening Balance	249000
Add: new purchases	6600
Less: Depreciation	-5300	250300
Total Assets		439180
Liabilities and Shareholders' Equity
Accounts Payable (191000*60%)		114600
Notes Payable		27000
Common Share		180000
Retained Earnings
Opening Balance	95250
Add: current profits	22330	117580
Total liabilities and Shareholders' Equity		439180