The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $200,000 for May. Of these sales, $60,000 will be for cash; the remainder will be credit sales. One-half of month's credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All the April 30 accounts receivable will be collected in May. b. Purchases of inventory are expected to total $120,000 during May. These purchases will all be on account. Forty percent of purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accoun payable to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $40,000. d. Selling and administrative expenses for May are budgeted at $72,000, exclusive of depreciation. These expenses will be paid cash. Depreciation is budgeted at $2,000 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $6,500 will be purchased for cash during May. g. During May, the company will borrow $20,000 from its bank by giving a new note payable to the bank for that amount. The ne

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Assets
Cash
Accounts receivable
Inventory
Buildings and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Note payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
Minden Company
Balance Sheet
April 30
$ 9,000
54,000
30,000
207,000
$300,000
$ 63,000
14,500
180,000
42,500
$300,000
Transcribed Image Text:Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings Total liabilities and stockholders' equity Minden Company Balance Sheet April 30 $ 9,000 54,000 30,000 207,000 $300,000 $ 63,000 14,500 180,000 42,500 $300,000
The company is in the process of preparing a budget for May and has assembled the following data:
a. Sales are budgeted at $200,000 for May. Of these sales, $60,000 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 $120,000 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 $40,000.
d. Selling and administrative expenses for May are budgeted at $72,000, exclusive of depreciation. These expenses will be paid in
cash. Depreciation is budgeted at $2,000 for the month.
e. The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the interest relates to May.)
f. New refrigerating equipment costing $6,500 will be purchased for cash during May.
g. During May, the company will borrow $20,000 from its bank by giving a new note payable to the bank for that amount. The new
note will be due in one year.
Transcribed Image Text:The company is in the process of preparing a budget for May and has assembled the following data: a. Sales are budgeted at $200,000 for May. Of these sales, $60,000 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 $120,000 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 $40,000. d. Selling and administrative expenses for May are budgeted at $72,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,000 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $100 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $6,500 will be purchased for cash during May. g. During May, the company will borrow $20,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.
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τυιαι Γαγiicit
Net cash flow
Beginning cash ance
Ending cash balance
Step 5 Budgeted Income Statement
Budgeted Income Statement for May
Sales
Less: Cost of Purchase consumed
(30000+120000-40000)
Gross Profit
Less:
Selling and Adm. Expenses
Depreciation
Interest on Notes Payable
Total
Net Income
Step 6 Budgeted Balance Sheet
Minden Company
Budgeted Balance sheet as on May 31
Assets
Cash
The company is in the process of preparing a budget...
204TUU
-100
9000
8900
Amount $
72000
2000
100
Amount $
200000
110000
90000
74100
15900
Amount $
ASK AN EXPERT CHAT | √ MATH SOLVER
8900
where from 9
Transcribed Image Text:X Search the web ↑ EXPERT SOLUTION FOLLOW-UP QUESTIONS ↓ Homework help starts here! ← Q&A Library τυιαι Γαγiicit Net cash flow Beginning cash ance Ending cash balance Step 5 Budgeted Income Statement Budgeted Income Statement for May Sales Less: Cost of Purchase consumed (30000+120000-40000) Gross Profit Less: Selling and Adm. Expenses Depreciation Interest on Notes Payable Total Net Income Step 6 Budgeted Balance Sheet Minden Company Budgeted Balance sheet as on May 31 Assets Cash The company is in the process of preparing a budget... 204TUU -100 9000 8900 Amount $ 72000 2000 100 Amount $ 200000 110000 90000 74100 15900 Amount $ ASK AN EXPERT CHAT | √ MATH SOLVER 8900 where from 9
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Step 6 Budgeted Balance Sheet
Minden Company
Budgeted Balance sheet as on May 31
Assets
Cash
Accounts Receivable
Inventory
Building and equipment, net of Depreciation
Total Assets
Liabilities and stakeholders equity
Accounts Payable
Notes Payable
Common Stock
Retained Earnings
Total Liabilities and stakeholders equity
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FOLLOW UP QUESTION
WAS THIS HELPFUL?
FEEDBACK
The company is in the process of preparing a budget...
во
Amount $
8900
70000
40000
211500
330400
ASK AN EXPERT CHAT | √ MATH SOLVER
72000
20000
180000
58400
330400
where from
Transcribed Image Text:X Search the web ↑ EXPERT SOLUTION RECOMMENDED QUESTIONS Homework help starts here! ← Q&A Library Step 6 Budgeted Balance Sheet Minden Company Budgeted Balance sheet as on May 31 Assets Cash Accounts Receivable Inventory Building and equipment, net of Depreciation Total Assets Liabilities and stakeholders equity Accounts Payable Notes Payable Common Stock Retained Earnings Total Liabilities and stakeholders equity Still Need Help? FOLLOW UP QUESTION WAS THIS HELPFUL? FEEDBACK The company is in the process of preparing a budget... во Amount $ 8900 70000 40000 211500 330400 ASK AN EXPERT CHAT | √ MATH SOLVER 72000 20000 180000 58400 330400 where from
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Follow-up Question
onsumed
es
e
heet
as on May 31
net of Depreciation
ers equity
Amount $
72000
2000
100
Amount $
200000
110000
90000
74100
15900
Where the Red
come from ?
Amount $
8900
70000
40000
211500
330400
O
72000
20000
180000
58400
NO.
Transcribed Image Text:onsumed es e heet as on May 31 net of Depreciation ers equity Amount $ 72000 2000 100 Amount $ 200000 110000 90000 74100 15900 Where the Red come from ? Amount $ 8900 70000 40000 211500 330400 O 72000 20000 180000 58400 NO.
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