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 $ 9,200 Accounts receivable 76,250 Inventory 49,750 Buildings and equipment, net of depreciation 228,000 Total assets $ 363,200 Liabilities and Stockholders’ Equity Accounts payable $ 63,750 Note payable 23,900 Common stock 180,000 Retained earnings 95,550 Total liabilities and stockholders’ equity $ 363,200 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $227,000 for May. Of these sales, $68,100 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 $159,000 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 $87,500. Selling and administrative expenses for May are budgeted at $79,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,000 for the month. The note payable on the April 30 balance sheet will be paid during May, with $105 in interest. (All of the interest relates to May.) New refrigerating equipment costing $11,800 will be purchased for cash during May. During May, the company will borrow $25,100 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: 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.

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 $ 9,200 Accounts receivable 76,250 Inventory 49,750 Buildings and equipment, net of depreciation 228,000 Total assets $ 363,200 Liabilities and Stockholders’ Equity Accounts payable $ 63,750 Note payable 23,900 Common stock 180,000 Retained earnings 95,550 Total liabilities and stockholders’ equity $ 363,200 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $227,000 for May. Of these sales, $68,100 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 $159,000 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 $87,500. Selling and administrative expenses for May are budgeted at $79,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,000 for the month. The note payable on the April 30 balance sheet will be paid during May, with $105 in interest. (All of the interest relates to May.) New refrigerating equipment costing $11,800 will be purchased for cash during May. During May, the company will borrow $25,100 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: 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please answer the first 3 parts

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 premium European chocolates. The company’s balance sheet as of April 30 is given below:

Minden Company Balance Sheet April 30
Assets
Cash	$ 9,200
Accounts receivable	76,250
Inventory	49,750
Buildings and equipment, net of depreciation	228,000
Total assets	$ 363,200
Liabilities and Stockholders’ Equity
Accounts payable	$ 63,750
Note payable	23,900
Common stock	180,000
Retained earnings	95,550
Total liabilities and stockholders’ equity	$ 363,200

The company is in the process of preparing a budget for May and has assembled the following data:

Sales are budgeted at $227,000 for May. Of these sales, $68,100 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 $159,000 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 $87,500.
Selling and administrative expenses for May are budgeted at $79,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,000 for the month.
The note payable on the April 30 balance sheet will be paid during May, with $105 in interest. (All of the interest relates to May.)
New refrigerating equipment costing $11,800 will be purchased for cash during May.
During May, the company will borrow $25,100 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:

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.

### Cash Management Exercise for May

#### Requirements:

**Step 1: Calculate Expected Cash Collections**
- Determine the total cash collections from customers for the month of May.

**Step 2: Calculate Expected Cash Disbursements**
- Determine the total cash disbursements for merchandise purchases during May.

#### Input Fields:

- **Total Cash Collections:** [Input Box]
- **Total Cash Disbursements:** [Input Box]

#### Navigation:

- **Previous Step:** Button labeled "Req 1 and 2" (disabled)
- **Next Step:** Button labeled "Req 3" (click to proceed)

This exercise helps in understanding cash flow management for a specific period, focusing on collections and disbursements related to operations.

**Cash Budget Preparation for May**

This section involves preparing a cash budget for Minden Company for the month of May. The budget should indicate cash deficiency, repayments, and interest with a minus sign. Below is the structure for compiling the budget:

---

### Minden Company
**Cash Budget**

**For the Month of May**

- **Beginning cash balance**

- **Add collections from customers**

- **Total cash available**

- **Less cash disbursements:**
- Purchase of inventory
- Selling and administrative expenses
- Purchases of equipment

- **Total cash disbursements**

- **Excess of cash available over disbursements**

- **Financing:**
- Borrowing—note
- Repayments—note
- Interest

- **Total financing**

- **Ending cash balance**

---

Users are instructed to complete the question by entering answers in the provided tabs labeled Req 1 and 2, Req 3, Req 4, and Req 5. Each tab likely contains sections corresponding to different parts of the cash budget or related financial tasks.

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