inden 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 $ 14,300 Accounts receivable 55,750 Inventory 49,250 Buildings and equipment, net of depreciation 217,000 Total assets $ 336,300 Liabilities and Stockholders’ Equity Accounts payable $ 65,000 Note payable 16,500 Common stock 180,000 Retained earnings 74,800 Total liabilities and stockholders’ equity $ 336,300 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $292,000 for May. Of these sales, $87,600 will be for cash; the remainder will 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. Purchases of inventory are expected to total $216,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May. The May 31 inventory balance is budgeted at $72,500. Selling and administrative expenses for May are budgeted at $82,200, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4,500 for the month. The note payable on the April 30 balance sheet will be paid during May, with $375 in interest. (All of the interest relates to May.) New refrigerating equipment costing $7,100 will be purchased for cash during May. During May, the company will borrow $20,500 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: Calculate the expected cash collections from customers for May. Calculate the expected cash disbursements for merchandise purchases for May. Prepare a cash budget for May.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
This is the same question, but I was only allowed to upload two images)
Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below:
|
Minden Company |
|
|
Assets |
|
|
Cash |
$ 14,300 |
|
|
55,750 |
|
Inventory |
49,250 |
|
Buildings and equipment, net of |
217,000 |
|
Total assets |
$ 336,300 |
|
Liabilities and |
|
|
Accounts payable |
$ 65,000 |
|
Note payable |
16,500 |
|
Common stock |
180,000 |
|
|
74,800 |
|
Total liabilities and stockholders’ equity |
$ 336,300 |
The company is in the process of preparing a budget for May and has assembled the following data:
- Sales are budgeted at $292,000 for May. Of these sales, $87,600 will be for cash; the remainder will 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.
- Purchases of inventory are expected to total $216,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May.
- The May 31 inventory balance is budgeted at $72,500.
- Selling and administrative expenses for May are budgeted at $82,200, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4,500 for the month.
- The note payable on the April 30 balance sheet will be paid during May, with $375 in interest. (All of the interest relates to May.)
- New refrigerating equipment costing $7,100 will be purchased for cash during May.
- During May, the company will borrow $20,500 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.
Required:
- Calculate the expected cash collections from customers for May.
- Calculate the expected cash disbursements for merchandise purchases for May.
- Prepare a
cash budget for May. - Prepare a
budgeted income statement for May. - Prepare a budgeted balance sheet as of May 31.
![### Calculation Task Overview
As part of this exercise, you'll need to determine specific financial metrics for the month of May. Please follow the instructions to complete the given tasks. Enter your answers in the respective tabs provided.
### Instructions
#### Required Calculations for May:
1. **Calculate the expected cash collections from customers.**
- **Total cash collections:** [Input required]
2. **Calculate the expected cash disbursements for merchandise purchases.**
- **Total cash disbursements:** [Input required]
### Interface Description
The interface includes multiple tabs labeled as:
- **Req 1 and 2**: For the first and second calculation requirements.
- **Req 3**: For the third calculation (not visible in the current prompt).
- **Req 4**: For the fourth calculation (not visible in the current prompt).
- **Req 5**: For the fifth calculation (not visible in the current prompt).
### Input Fields:
- **Total cash collections**: [Enter the calculated value here]
- **Total cash disbursements**: [Enter the calculated value here]
### Diagram/Graph Explanation:
No diagrams or graphs are included in this prompt. The task is focused on the entry of numerical calculations into the provided text fields.
**Note:** Ensure that you analyze all required data and perform necessary calculations accurately before entering values into the interface.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78d7be80-233f-42fa-8c01-70bc4da57dc5%2F033d868a-d508-4e7d-861f-06bd07deb140%2F1v6cvyw_processed.jpeg&w=3840&q=75)
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