Question

In: Accounting

Problem 7-17A Cash Budget; Income Statement; Balance Sheet [LO7-2, LO7-4, LO7-8, LO7-9, LO7-10] Minden Company is...

Problem 7-17A Cash Budget; Income Statement; Balance Sheet [LO7-2, LO7-4, LO7-8, LO7-9, LO7-10] 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 $ 11,400 Accounts receivable 75,000 Inventory 41,000 Buildings and equipment, net of depreciation 224,000 Total assets $ 351,400 Liabilities and Stockholders’ Equity Accounts payable $ 70,000 Note payable 15,500 Common stock 180,000 Retained earnings 85,900 Total liabilities and stockholders’ equity $ 351,400 The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $220,000 for May. Of these sales, $66,000 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. b. Purchases of inventory are expected to total $128,000 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. c. The May 31 inventory balance is budgeted at $56,000. d. Selling and administrative expenses for May are budgeted at $86,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $6,750 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $565 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $6,700 will be purchased for cash during May. g. During May, the company will borrow $25,300 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-a. Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases. 1-b. Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.) 2. Prepare a budgeted income statement for May using the absorption costing income statement format 3. Prepare a budgeted balance sheet as of May 31.

Solutions

Expert Solution

1-a) Schedule of Expected cash collection
Cash sales-May 66,000
Collections on account receivable
April 30 balance 75,000
May sales (220000-66000)*50% 77000
total cash recepits 218,000
Schedule of Expected cash disbursements
April 30 accounts payable balance 70,000
May purchases (128000*40%) 51200
total cash payments 121,200
1-b)                          Cash Budget                                                     
Beginning cash balance 11,400
Add Collections from customers 218,000
total cash available 229,400
less Cash disbursements
purchase of inventoru 121,200
selling and administrative expense 86,000
purchase of Equipment 6,700
total cash disbursements 213,900
Excess of cash available over disbursements 15,500
financing:
borrowing -note 25,300
Repayments-note -15,500
interest -565
total financing 9,235
Ending cash balance 24,735
Budgeted income statement
sales 220,000
cost of goods sold:
beginning inventory 41,000
purchases 128,000
goods available for sale 169,000
ending invnetory 56,000
cost of goods sold: 113,000
Gross margin 107,000
Selling and administrative expesne 86,000
Depreciation expense 6,750
net operating income 14,250
interest expesne 565
net income 13,685
Budgeted balance sheet
Assets
Cash 24,735
Account receivable 77000
inventory 56,000
buildings & equipment,net of depreciaiton 224050
(224000+6700-6750)
total Assets 381,785
Laibilities & stockholder's Equity
Accounts payable 76800
note payable 25,300
common stock 180,000
Retained earnings (85900+13685 99,585
total liabilities & stockholders equity 381685

Related Solutions

Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 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 $ 12,000 Accounts receivable 77,500 Inventory 42,000 Buildings and equipment, net of depreciation 225,000 Total assets $ 356,500 Liabilities and Stockholders’ Equity Accounts payable $ 78,250 Note payable 19,300 Common stock 180,000 Retained earnings 78,950 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 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 $ 12,000 Accounts receivable 77,500 Inventory 42,000 Buildings and equipment, net of depreciation 225,000 Total assets $ 356,500 Liabilities and Stockholders’ Equity Accounts payable $ 78,250 Note payable 19,300 Common stock 180,000 Retained earnings 78,950 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 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...
Problem 8-17 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-17 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 $ 9,000 Accounts receivable 54,000 Inventory 30,000 Buildings and equipment, net of depreciation 207,000 Total assets $ 300,000 Liabilities and Stockholders’ Equity Accounts payable $ 63,000 Note payable 14,500 Common stock 180,000 Retained earnings 42,500 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 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 $ 15,000 Accounts receivable 78,000 Inventory 37,750 Buildings and equipment, net of depreciation 232,000 Total assets $ 362,750 Liabilities and Stockholders’ Equity Accounts payable $ 81,500 Note payable 14,000 Common stock 180,000 Retained earnings 87,250 Total liabilities and...
Problem 8-17 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-17 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 $ 9,000 Accounts receivable 54,000 Inventory 30,000 Buildings and equipment, net of depreciation 207,000 Total assets $ 300,000 Liabilities and Stockholders’ Equity Accounts payable $ 63,000 Note payable 14,500 Common stock 180,000 Retained earnings 42,500 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 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 $ 10,000 Accounts receivable 62,750 Inventory 32,750 Buildings and equipment, net of depreciation 219,000 Total assets $ 324,500 Liabilities and Stockholders’ Equity Accounts payable $ 69,000 Note payable 22,700 Common stock 180,000 Retained earnings 52,800 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 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 $ 16,700 Accounts receivable 75,500 Inventory 37,000 Buildings and equipment, net of depreciation 258,000 Total assets $ 387,200 Liabilities and Stockholders’ Equity Accounts payable $ 86,750 Note payable 15,700 Common stock 180,000 Retained earnings 104,750 Total liabilities and...
Problem 8-19 (REV) Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company...
Problem 8-19 (REV) 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 $ 11,100 Accounts receivable 72,500 Inventory 37,500 Buildings and equipment, net of depreciation 238,000 Total assets $ 359,100 Liabilities and Stockholders’ Equity Accounts payable $ 68,000 Note payable 19,400 Common stock 180,000 Retained earnings 91,700 Total liabilities...
Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO7-2, LO7-4, LO7-9, LO7-10] [The...
Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO7-2, LO7-4, LO7-9, LO7-10] [The following information applies to the questions displayed below.] Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets   Cash $   74,000   Accounts receivable 143,000   Inventory 73,500   Plant and equipment, net of depreciation 224,000   Total assets $...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT