I need help in this Accounting problem. Thanks Minden Company is a wholesale dis

Question

I need help in this Accounting problem. Thanks

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 $ 14,300 55,750 49,250 217,000 Total assets $336,300 Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings $ 65,000 16,500 180,000 74,800 Total liabilities and stockholders' equity S 336,300 The company is in the process of preparing a budget for May and has assembled the following data a. Sales are budgeted at $292,000 for May. Of these sales, $87,600 will be for cash; the remaindell be credit sales. One-half of a month's credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts receivable will be collected in May

Explanation / Answer

Minden Company Requirement 1 Expected cash collection for May Sales for May 292000 Cash sales 87600 87600 Credit sales 204400 50% of above is collected in the month of May itself 102200 Accounts receivable as of April 30 is collected in May 55750 Total Cash Collection for the month of May 245550 Requirement 2 Expected Cash disbursement for merchandise for May Purchases for May 216000 40% of the above is paid in May itself 86400 Accounts Payable as of April 30 is paid in May 65000 Total cash disbursement for merchandise 151400 Requirement 3 Cash Budget for May Beginning Cash Balance 14300 Collection from Sales & customers 245550 Total cash available 259850 Less : Cash Disbursement towards Purchase of Inventory 151400 Selling and administrative expenses 82200 Purchase of New Refrigerating Equipment 7100 Total Cash Payments 240700 Excess of cash available over disbursementss 19150 Financing Borrowing Note 20500 Repayments Note 16500 Interest 375 Total Finance 3625 Ending Cash balance 22775 Requirement 4 Budgeted Income statement for May Revene from Sales 292000 Less : Cost of goods sold Beginning Inventory 49250 Add : Purchases 216000 Less :Ending Inventory 72500 Total cost of goods sold 192750 Gross Profit 99250 Operating expenses Selling and administrative expenses 82200 Depreciation 4500 Total Operating expenses 86700 Operating Income 12550 Less : Interest for the month of May 375 Net Income 12175 Requirement 5 Budgeted Balance Sheet as of May 31. Minden Company Balance Sheet May-31 Assets Cash 22,775 From Cash budget Accounts receivable 1,02,200 =(292000-87600)*50% Inventory 72,500 Given Buildings and equipment, net of depreciation 2,19,600 =217000+7100-4500 Total assets 4,17,075 Liabilities and Stockholders’ Equity Accounts payable 1,29,600 =216000*60% Note payable 20,500 Given Common stock 1,80,000 Given Retained earnings 86,975 =74800+12175 Total liabilities and stockholders’ equity 4,17,075

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