em 8-19 (Algo) Cash Budget; Income Statement; Balance Sheet (LO8-2, LO8-4, LO8-8, LO8-9, LC Company Is a wholesale distributor of premlum European chocolates. The company's balance sheet as of April 30 is given Minden Company Balance Sheet April 30 ts receivable pry ngs and equi pment, net of depreciation 18, e00 76, 000 32, 508 243,e06 $ 369, 500 assets ities and Stockholders' Equity Is payable eyable stock 80, 250 13. 200 180, eee 96,050 ed earnings Habilities and stockholders equity $ 369, see pany Is in the process of prenartna
em 8-19 (Algo) Cash Budget; Income Statement; Balance Sheet (LO8-2, LO8-4, LO8-8, LO8-9, LC Company Is a wholesale distributor of premlum European chocolates. The company's balance sheet as of April 30 is given Minden Company Balance Sheet April 30 ts receivable pry ngs and equi pment, net of depreciation 18, e00 76, 000 32, 508 243,e06 $ 369, 500 assets ities and Stockholders' Equity Is payable eyable stock 80, 250 13. 200 180, eee 96,050 ed earnings Habilities and stockholders equity $ 369, see pany Is in the process of prenartna
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
![Problem 8-19 (Algo) Cash Budget; Income Statement; Balance Sheet (LO8-2, LO8-4, LO8-8, LO8-9, LO8-
10]
Minden Company Is a wholesale distributor of premlum European chocolates. The company's balance sheet as of April 30 is grven
below:
Minden Company
Balance Sheet
April 30
Assets
Cash
Accounts receivable
Inventory
Buildings and equipment, net of depreciation
18, e00
76, 000
32,508
243,e00
Total assets
$ 369, 500
Liabilities and Stockholders' Equity
Accounts payable
Note payable
Comon stock
Retained earnings
S 80, 250
13, 200
188, eee
96,850
$369, see
Total liabilities and stockholders ecuity
The company Is In the process of preparing a budget for May and has assemblec the following data:
a. Sales are budgeted at $238,000 for May. Of these sales, $71.400 will be for cash; the remalnder will be credit sales. One-half of a
month's credit sales are collected in the month the sales are made, and the remalnder is collected in the following month. All of the
April 30 accounts recelvable will be collected in May.
b. Purchases of Inventory are expected to total $124,000 during May. These purchases wil all be on account. Forty percent of all
purchases are pald for In the month of purchase; the remalnder are paid in the following month. All of the April 30 accounts payable
to suppliers wlil be pald during May.
c. The May 31 Inventory balance is budgeted at $24,000.
d. Selling and administrative expenses for May are budgeted at $86.100, exclusive of depreclation. These expenses will be pald in
cash. Depreciation is budgeted at $4,450 for the month
e. The note payable on the April 30 balance sheet will be pald during May, with $400 in Interest. (All of the interest relates to May)
1. New refrigerating equipment costing $15.100 will be purchased for cash during May.
g. During May, the company will borrow $23,800 from Its bank by glving a new note payable to the bank for that amount The new
note will be due in one year.
Required:
1. Calculate the expected cash collections from customers for May
2 Calculate the expected cash disbursements for merchandise purchases for May
3. Prepare a cash budget for May.
4. Prepare a budgeted Income statement for May.
5. Prepare a budgeted balance sheet as of May 31.
Complete this question by entering your answers in the tabs below.
Reg 1 arnd 2
Req 3
Reg 4
Reg 5
1. Calculate the expected cash collections from customers for May.
2. Calculate the expected cash disbursements for merchandise purchases for May
Total cash collections
Total cash disbursements](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa204cf79-6df4-4f25-af61-d4fca6ca5b9e%2F288b000d-1e69-455a-a237-2c533b40d3be%2Fuft46he_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 8-19 (Algo) Cash Budget; Income Statement; Balance Sheet (LO8-2, LO8-4, LO8-8, LO8-9, LO8-
10]
Minden Company Is a wholesale distributor of premlum European chocolates. The company's balance sheet as of April 30 is grven
below:
Minden Company
Balance Sheet
April 30
Assets
Cash
Accounts receivable
Inventory
Buildings and equipment, net of depreciation
18, e00
76, 000
32,508
243,e00
Total assets
$ 369, 500
Liabilities and Stockholders' Equity
Accounts payable
Note payable
Comon stock
Retained earnings
S 80, 250
13, 200
188, eee
96,850
$369, see
Total liabilities and stockholders ecuity
The company Is In the process of preparing a budget for May and has assemblec the following data:
a. Sales are budgeted at $238,000 for May. Of these sales, $71.400 will be for cash; the remalnder will be credit sales. One-half of a
month's credit sales are collected in the month the sales are made, and the remalnder is collected in the following month. All of the
April 30 accounts recelvable will be collected in May.
b. Purchases of Inventory are expected to total $124,000 during May. These purchases wil all be on account. Forty percent of all
purchases are pald for In the month of purchase; the remalnder are paid in the following month. All of the April 30 accounts payable
to suppliers wlil be pald during May.
c. The May 31 Inventory balance is budgeted at $24,000.
d. Selling and administrative expenses for May are budgeted at $86.100, exclusive of depreclation. These expenses will be pald in
cash. Depreciation is budgeted at $4,450 for the month
e. The note payable on the April 30 balance sheet will be pald during May, with $400 in Interest. (All of the interest relates to May)
1. New refrigerating equipment costing $15.100 will be purchased for cash during May.
g. During May, the company will borrow $23,800 from Its bank by glving a new note payable to the bank for that amount The new
note will be due in one year.
Required:
1. Calculate the expected cash collections from customers for May
2 Calculate the expected cash disbursements for merchandise purchases for May
3. Prepare a cash budget for May.
4. Prepare a budgeted Income statement for May.
5. Prepare a budgeted balance sheet as of May 31.
Complete this question by entering your answers in the tabs below.
Reg 1 arnd 2
Req 3
Reg 4
Reg 5
1. Calculate the expected cash collections from customers for May.
2. Calculate the expected cash disbursements for merchandise purchases for May
Total cash collections
Total cash disbursements
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