Problem 8-18 (continued)
2.
Minden Company
Budgeted Income Statement
For the Month of May
Sales ……………………………………………….
$220,000
Cost of goods sold:
Beginning inventory ………………………….
$ 30,000
Add purchases …………………………………
120,000
Goods available for sale ……………………..
150,000
Ending inventory ………………………………
40,000
Cost of goods sold ………………………………
110,000
Gross margin ……………………………………..
110,000
Selling and administrative expenses
($72,000 + $2,000) ………………………….
74,000
Net operating income ………………………….
36,000
Interest expense ………………………………..
100
Net income …………………………..…………..
$ 35,900
3.
Minden Company
Budgeted Balance Sheet
May 31
Assets
Cash ……………………………………………………………….
$ 22,900
Accounts receivable (40% × $160,000) ………………….
64,000
Inventory …………………………………………………………
40,000
Buildings and equipment, net of depreciation
($207,000 + $6,500 – $2,000) …………………………...
211,500
Total assets ………………………………………………………
$338,400
Liabilities and Stockholders’ Equity
Accounts payable (50% × 120,000) ……………………….
$ 60,000
Note payable …………………………………………………….
20,000
Capital stock …………………………………………………….
180,000
Retained earnings ($42,500 + $35,900) ………………….
78,400
Total liabilities and stockholders’ equity …………………..
$338,400
