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Minden Company is a wholesale distributor of premium European chocolates. The companys balance sheet as of April 30 is given below:

Minden Company Balance Sheet April 30
Assets
Cash	$	15,800
Accounts receivable		70,200
Inventory		38,750
Buildings and equipment, net of depreciation		222,000
Total assets	$	346,750
Liabilities and Stockholders Equity
Accounts payable	$	74,750
Note payable		14,700
Common stock		180,000
Retained earnings		77,300
Total liabilities and stockholders equity	$	346,750

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

a.	Sales are budgeted at $260,000 for May. Of these sales, $78,000 will be for cash; the remainder will be credit sales. One-half of a months 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 $155,000 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 $59,500.
d.	Selling and administrative expenses for May are budgeted at $99,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4,550 for the month.
e.	The note payable on the April 30 balance sheet will be paid during May, with $460 in interest. (All of the interest relates to May.)
f.	New refrigerating equipment costing $11,000 will be purchased for cash during May.
g.	During May, the company will borrow $21,500 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:
1-a.	Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases..

	Minden Company Schedule of Expected Cash Collections Cash salesMay Collections on account receivable: April 30 balance May sales Total cash receipts

	Minden Company Schedule of Expected Cash Disbursements April 30 accounts payable balance May purchases Total cash payments

1-b.	Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

	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: Borrowingnote Repaymentsnote Interest Total financing Ending cash balance

2.	Prepare a budgeted income statement for May using the absorption costing income statement format

	Minden Company Budgeted Income Statement For the Month of May Cost of goods sold:

3.	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

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