BARKER, INC. Balance Sheet December 31, 2018 Assets Current Assets: Cash $ 2,400 Accounts Recelvable 1,400 Raw Materials Inventory 500 Finished Goods Inventory 1,350 Total Current Assets $ 5,650 Property, Plant, and Equipment: Equipment 16,000 Less: Accumulated Depreciation (1,500) 14,500 Total Assets $ 20,150 Liabilities Current Liabilities: Accounts Payable $ 1,000 Stockholders' Equity Common Stock, no par $ 6,500 Retained Earnings 12,650 Total Stockholders' Equity 19,150 Total Liabilities and Stockholders Equity $ 20,150
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Preparing the financial budget—budgeted balance sheet
Barker, Inc. has the following balance sheet at December 31, 2018:
Barker projects the following transactions for 2019:
Sales on account, $20,000
Cash receipts from customers from sales on account, $17,600
Purchase of raw materials on account, $7,000
Payments on account, $3,500 ‘
Total cost of completed products, $16,600, which includes the following:
Raw materials used, $7,100
Direct labor costs incurred and paid, $3,900
Prepare a budgeted balance sheet for Barker, Inc. for December 31, 2019.
(Hint: it may be helpful to trace the effects of each transaction on the
Cost of goods sold, $14,800
Selling and administrative costs incurred and paid, $500
Purchase of equipment, paid in 2019, $2,000
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