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 stockholders’ equity $ 324,500 The company is in the process of preparing a budget for May and has assembled the following data: Sales are budgeted at $254,000 for May. Of these sales, $76,200 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 $137,000 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 $45,000. Selling and administrative expenses for May are budgeted at $98,400, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,550 for the month. The note payable on the April 30 balance sheet will be paid during May, with $350 in interest. (All of the interest relates to May.) New refrigerating equipment costing $8,700 will be purchased for cash during May. During May, the company will borrow $27,400 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. Calculate the expected cash collections from customers for May. 2. Calculate the expected cash disbursements for merchandise purchases for May. 3. Prepare a cash budget for May.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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 |
219,000 |
| Total assets | $ 324,500 |
| Liabilities and |
|
| Accounts payable | $ 69,000 |
| Note payable | 22,700 |
| Common stock | 180,000 |
| 52,800 | |
| Total liabilities and stockholders’ equity | $ 324,500 |
The company is in the process of preparing a budget for May and has assembled the following data:
-
Sales are budgeted at $254,000 for May. Of these sales, $76,200 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 $137,000 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 $45,000.
-
Selling and administrative expenses for May are budgeted at $98,400, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,550 for the month.
-
The note payable on the April 30 balance sheet will be paid during May, with $350 in interest. (All of the interest relates to May.)
-
New refrigerating equipment costing $8,700 will be purchased for cash during May.
-
During May, the company will borrow $27,400 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. Calculate the expected cash collections from customers for May.
2. Calculate the expected cash disbursements for merchandise purchases for May.
3. Prepare a
4. Prepare a
5. Prepare a budgeted balance sheet as of May 31.
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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 |
219,000 |
| Total assets | $ 324,500 |
| Liabilities and |
|
| Accounts payable | $ 69,000 |
| Note payable | 22,700 |
| Common stock | 180,000 |
| 52,800 | |
| Total liabilities and stockholders’ equity | $ 324,500 |
The company is in the process of preparing a budget for May and has assembled the following data:
-
Sales are budgeted at $254,000 for May. Of these sales, $76,200 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 $137,000 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 $45,000.
-
Selling and administrative expenses for May are budgeted at $98,400, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $5,550 for the month.
-
The note payable on the April 30 balance sheet will be paid during May, with $350 in interest. (All of the interest relates to May.)
-
New refrigerating equipment costing $8,700 will be purchased for cash during May.
-
During May, the company will borrow $27,400 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. Calculate the expected cash collections from customers for May.
2. Calculate the expected cash disbursements for merchandise purchases for May.
3. Prepare a
4. Prepare a
5. Prepare a budgeted balance sheet as of May 31.
sub parts 4 and 5
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