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 $ 10,300 70,000 43,000 227,000 Total assets $350,300 Liabilities and Shareholders' Equity Accounts payable Note payable $86,000 23,000 180,000 Common shares Retained earnings 61,300 350,300 Total liabilities and shareholders' equity The company is in the process of preparing a budget for May and has assembled the following data:

Answer 1

Required Budgets are as prepared below:

Particulars	Amount ($)
May Sales	276,000
Cash sales	82,800
Credit sales (Total sales minus cash sales)	193,200
Collected in May (193,200/2)	96,600
Accounts Receivable	96,600
Minden Company
Schedule of expected Cash collections
For the Month ended May 31
	Month
Particulars	May
Cash Sales May	82,800
Collections on Accounts Receivable
April 30 balance	70,000
May Sales	96,600
Total cash Receipts	249,400
Particulars	Amount ($)
May purchases	147,000
Paid in may (40%)	58,800
Paid in June (60%)	88,200
Minden Company
Schedule of expected Cash Disbursements
For the Month ended May 31
	Month
Particulars	May
April 30 account payable balance	86,000
May purchases	58,800
Total cash payments	144,800
Minden Company
Cash Budget
For the month of May
	Month
Particulars	May
Beginning Cash balance	$10,300
Add: Collection from customers	$249,400
Total cash available	$259,700
less: cash disbursement
Purchase of inventory	($144,800)
Selling and administrative expense	($97,500)
Purchase of equipment	($12,100)
Total cash disbursement	($254,400)
Excess of cash available over disbursement	$5,300
Financing
Borrowing-note	$29,200
Repayment-note	($23,000)
Interest	($235)
Total financing	$5,965
Ending Cash balance	$11,265
Minden Company
Budgeted Income Statement
May-31
Particulars	Amount ($)	Amount ($)
Sales		276,000
Less: Cost of goods sold (43,000+147,000-43,000)		147,000
Gross Profit		129,000
Less:
Depreciation	3,200
Selling and administrative exp	97,500	100,700
Net Profit before interest		28,300
Interest expense	$235
Net operating Income		28,065
Minden Company
Budgeted balance Sheet
May-31
Assets
Cash	11,265
Accounts Receivable	96,600
Inventory	43,000
Building and Equipment Net (227,000+12,100-3,200)	235,900
Total assets	386,765
Liabilities and Stockholders' Equity
Accounts Payable purchases	88,200
Note Payable	29,200
Common Stock	180,000
Retained earnings (61,300+28,065)	89,365
Total liabilities and stockholders' equity	386,765