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 Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings Total liabilities and stockholders' equity 9,600 54,750 53,750 214,000 332,100 $ $ 70,500 18,100 180,000 63,500 332,100 $ The company is in the process of preparing a budget for May and has assembled the following data:

Answer 1

a)	Expected Cash collection for May
	Cash sales for May			$   77,100.00
	50% of credit sales of May			$   89,950.00	($ 257000 - $ 77100) x 50%
	Accounts Receivable balance			$   54,750.00
				$ 221,800.00

b)	Cash disbursement for May (for merchandise purchase)
	40% of the purchase of May				$   48,400.00
	Accounts Payable balance				$   70,500.00
					$ 118,900.00

c)	Cash Budget for May
	Beginning balance			$     9,600.00
Add:	Collections			$ 221,800.00
	Total cash available			$ 231,400.00
Less:	Disbursements
	Merchandise purchase			$ 118,900.00
	Selling and Adm. Expenses			$   83,700.00
	Notes payable paid			$   18,440.00
	Refrigerator purchased			$   13,100.00
	Total disbursements			$ 234,140.00
	Net cash available			$    (2,740.00)
Add:	Borrowal			$   22,000.00
	Ending cash balance			$   19,260.00

d)	Income Statement
	Sales	$ 257,000.00
Less:	COGS ($ 53750 + $ 121000 - $ 31000)	$ 143,750.00
	Gross Profit	$ 113,250.00
Less:	Expenses:
	Selling and Adm. Expenses	$   83,700.00
	Depreciation	$     2,800.00
	Interest on Loan	$         340.00
	Net Income	$   26,410.00

e)	Balance Sheet
	Assets
	Cash		$   19,260.00
	Accounts Receivable		$   89,950.00
	Inventory		$   31,000.00
	B&E ($ 214000 + $ 13100 - $ 2800)		$ 224,300.00
			$ 364,510.00
	Liabilities and Equity
	Accounts Payable		$   72,600.00
	Note Payable		$   22,000.00
	Common Stock		$ 180,000.00
	Retained Earnings ($ 63500 + $ 26410)		$   89,910.00
			$ 364,510.00