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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
