Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden CompanyBalance SheetApril 30Assets Cash$ 14,300Accounts receivable55,750Inventory49,250Buildings and equipment, net of depreciation217,000Total assets$ 336,300Liabilities and Stockholders’ Equity Accounts payable$ 65,000Note payable16,500Common stock180,000Retained earnings74,800Total liabilities and stockholders’ equity$ 336,300The 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. **Prepare a Budgeted Balance Sheet as of May 31**---### Minden Company### Budgeted Balance Sheet### May 31**Assets**- __________________________- __________________________- __________________________- __________________________- __________________________**Total assets**: ______________________---**Liabilities and Stockholders' Equity**- __________________________- __________________________- __________________________- __________________________- __________________________**Total liabilities and stockholders' equity**: ______________________---**Explanation:**The above template is designed to prepare a budgeted balance sheet for Minden Company as of May 31. On an educational website, this would typically serve as an example or exercise for students learning how to create a budgeted balance sheet.The balance sheet is divided into two main sections:1. **Assets**: Lists all the resources owned by the company expected to provide future economic benefits. It typically includes items such as cash, accounts receivable, inventory, and property, plant, and equipment.2. **Liabilities and Stockholders' Equity**: - **Liabilities**: Lists the company's obligations or debts expected to be settled in the future, such as accounts payable, loans, and other financial commitments. - **Stockholders' Equity**: Represents the residual interest in the assets of the company after deducting liabilities, usually including items like common stock, retained earnings, and additional paid-in capital.The total assets must equal the total liabilities and stockholders' equity, maintaining the fundamental accounting equation: **Assets = Liabilities + Stockholders' Equity**. This balance ensures the financial statement is accurate and balanced. ### Cash Budget Preparation Example for Educational Website#### Task: Prepare a cash budget for May.(Note: Cash deficiency, repayments, and interest should be indicated by a minus sign.)---**Minden Company** **Cash Budget** **For the Month of May**| **Description** | **Amount** | |-------------------------------------------|----------------|| 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** | | ---This structure is designed for educational use to help students understand the components and calculations involved in creating a cash budget. Each section can be interacted with to input actual values according to the given data for the month of May. It’s important to note:- All entries should be accurately filled, and negative values for cash deficiency, repayments, and interest should be indicated with a minus sign for clarity.- The items under "Less cash disbursements" must be subtracted from "Total cash available" to determine the excess cash available over disbursements before considering financing activities.- Financing activities, which include borrowing, repayments, and interest, will further adjust the cash balance to provide the ending cash balance for the month.### Graphs and Diagrams ExplanationIn this example, there are no specific graphs or diagrams provided. However, in a comprehensive educational setting, graphical representations such as cash flow charts could be added to visually depict the inflows and outflows of cash, making the concept clearer for students.

Budgets are prepared to control costs where one estimates the various costs . It is used for…

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 $ 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. Prepare a budgeted income statement for May. Prepare a budgeted balance sheet as of May 31.

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 $ 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. Prepare a budgeted income statement for May. 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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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