Assets Current Assets: Cash $20,000 Accounts Receivable 18,500 Raw Materials Inventory 9,000 Finished Goods Inventory 16,000 Total Current Assets $63,500 Property Plant and Equipment 130,000 Less: Accumulated Depreciation (70,000) 60,000 Total Assets $123,500 Liabilities Current Liabilities: Accounts Payable $11,600 Stockholders’ Equity Common Stock $90,000 Retained Earnings 21,900 Total Stockholders’’ Equity 111,900 Total Liabilities and Stockholders’ Equity $123,500 Additional Information for the first quarter of 2021 is as follows: 1. Forecasted Sales are 1,400 youth bats and 3,300 adult bats 2. Finished Goods Inventory on 12/31/20 includes 700 youth bats at $15 each and 550 adult bats at $10 each 3. Desired ending Finished Goods Inventory is 220 youth bats and 300 adult bats 4. Direct materials requirements are 40 ounces of wood for youth bats and 70 ounces of wood for adult bats. The cost of wood is $0.10 per ounce. 5. Raw Materials Inventory on 12/31/20 includes 90,000 ounces of wood at $0.10 per ounce. 6. Desired ending Raw Materials Inventory is 90,000 ounces. 7. Each bat requires 0.4 hours of direct labor at $26 per hour. 8. Variable manufacturing overhead is $0.30 per bat. 9. Fixed manufacturing overhead includes $1,300 per quarter in depreciation and $14,977 per quarter for other costs, such as insurance and taxes. 10. Fixed selling and administrative expenses include $13,000 per quarter for salaries, $3,500 per quarter for rent, $1,400 per quarter for insurance, and $450 per quarter for depreciation 11. Variable selling and administrative expenses include supplies at 1% of sales. The Batting Company manufactures wood baseball bats. Two primary products are a youth bat and an adult bat. They sell the bats to sporting goods companies. All sales are made on account. The youth bat sells for $35. The adult bat sells for $50. The highest sales occur in the first quarter of the year as retailers prepare for spring baseball season. Create direct materials budget, direct labor budget, and manufacturing overhead budget
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Assets
Current Assets:
Cash $20,000
Accounts Receivable 18,500
Raw Materials Inventory 9,000
Finished Goods Inventory 16,000
Total Current Assets $63,500
Property Plant and Equipment 130,000
Less: Accumulated
Total Assets $123,500
Liabilities
Current Liabilities:
Accounts Payable $11,600
Common Stock $90,000
Total Stockholders’’ Equity 111,900
Total Liabilities and Stockholders’ Equity $123,500
Additional Information for the first quarter of 2021 is as follows:
1.
2. Finished Goods Inventory on 12/31/20 includes 700 youth bats at $15 each and 550 adult bats at $10 each
3. Desired ending Finished Goods Inventory is 220 youth bats and 300 adult bats
4. Direct materials requirements are 40 ounces of wood for youth bats and 70 ounces of wood for adult bats. The cost of wood is $0.10 per ounce.
5. Raw Materials Inventory on 12/31/20 includes 90,000 ounces of wood at $0.10 per ounce.
6. Desired ending Raw Materials Inventory is 90,000 ounces.
7. Each bat requires 0.4 hours of direct labor at $26 per hour.
8. Variable manufacturing
9. Fixed manufacturing overhead includes $1,300 per quarter in depreciation and $14,977 per quarter for other costs, such as insurance and taxes.
10. Fixed selling and administrative expenses include $13,000 per quarter for salaries, $3,500 per quarter for rent, $1,400 per quarter for insurance, and $450 per quarter for depreciation
11. Variable selling and administrative expenses include supplies at 1% of sales.
The Batting Company manufactures wood baseball bats. Two primary products are a youth bat and an adult bat. They sell the bats to sporting goods companies. All sales are made on account. The youth bat sells for $35. The adult bat sells for $50. The highest sales occur in the first quarter of the year as retailers prepare for spring baseball season.
Create direct materials budget, direct labor budget, and manufacturing overhead budget
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