Sales are budgeted at 280000 for may of these sales 60000

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Reference no: EM13597662

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 $9,900
Accounts receivable 66,000
Inventory 33,000
Buildings and equipment, net of depreciation 551,100
Total assets $660,000

Liabilities and Stockholders' Equity

Accounts payable $79,200
Note payable 14,520
Capital stock, no par 487,080
Retained earnings 79,200
Total liabilities and stockholders' equity $660,000

The company is in the process of preparing budget data for May. A number of budget items have already been prepared, as stated below:

a.Sales are budgeted at $280,000 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 $198,000 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.

Reference no: EM13597662

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