BRADLEY COMPANY Post-Closing Trial Balance December 31, 2018 Account Debit Credit Cash $ 15,000 Accounts Receivable 23,200 Raw Materials Inventory 11,000 Finished Goods Imventory 25,900 Equipment 125,000 Accumulated Depreciation $ 35,000 Accounts Payable 13,600 Common Stock 150,000 Retained Earnings 1,500 Totals $ 200,100 $ 200, 100 $ 305,000 Budgeted total sales, all on account 32,000 Budgeted direct materials to be purchased and used 12,500 Budgeted direct labor cost Budgeted manufacturing overhead costs: 2,100 Variable manufacturing overhead 1,300 Depreciation 1,350 Insurance and property taxes 72,000 Budgeted cost of goods sold Budgeted selling and administrative expenses: 7,000 Salaries expense 2,000 Rent expense 1,100 Insurance expense 550 Depreciation expense 15,250 Supplies expense 263,500 Budgeted cash receipts from customers 41,000 Budgeted income tax expense Budgeted purchase and payment for capital expenditures (additional equipment) 43,000

Question

Preparing a financial budget—budgeted income statement and balance sheet

Bradley Company has the following post-closing trial balance on December 31, 2018

The company’s accounting department has gathered the following budgeting information for the quarter of 2019:

Additional information:

  • Direct materials purchases are paid 70°/o in the quarter purchased and 30% in the next quarter.
  • Direct labor, manufacturing overhead, selling and administrative costs, and income tax expense are paid in the quarter incurred.
  • Accounts payable at December 31, 2018 are paid in the first quarter of 2019.

Requirements

  1. Prepare Bradley Company’s budgeted income statement for the first quarter of 2019.
  2. Prepare Bradley Company’s budgeted balance sheet as of March 31, 2019.
BRADLEY COMPANY
Post-Closing Trial Balance
December 31, 2018
Account
Debit
Credit
Cash
$ 15,000
Accounts Receivable
23,200
Raw Materials Inventory
11,000
Finished Goods Imventory
25,900
Equipment
125,000
Accumulated Depreciation
$ 35,000
Accounts Payable
13,600
Common Stock
150,000
Retained Earnings
1,500
Totals
$ 200,100
$ 200, 100
Expand
Transcribed Image Text

BRADLEY COMPANY Post-Closing Trial Balance December 31, 2018 Account Debit Credit Cash $ 15,000 Accounts Receivable 23,200 Raw Materials Inventory 11,000 Finished Goods Imventory 25,900 Equipment 125,000 Accumulated Depreciation $ 35,000 Accounts Payable 13,600 Common Stock 150,000 Retained Earnings 1,500 Totals $ 200,100 $ 200, 100

$ 305,000
Budgeted total sales, all on account
32,000
Budgeted direct materials to be purchased and used
12,500
Budgeted direct labor cost
Budgeted manufacturing overhead costs:
2,100
Variable manufacturing overhead
1,300
Depreciation
1,350
Insurance and property taxes
72,000
Budgeted cost of goods sold
Budgeted selling and administrative expenses:
7,000
Salaries expense
2,000
Rent expense
1,100
Insurance expense
550
Depreciation expense
15,250
Supplies expense
263,500
Budgeted cash receipts from customers
41,000
Budgeted income tax expense
Budgeted purchase and payment for capital expenditures
(additional equipment)
43,000
Expand
Transcribed Image Text

$ 305,000 Budgeted total sales, all on account 32,000 Budgeted direct materials to be purchased and used 12,500 Budgeted direct labor cost Budgeted manufacturing overhead costs: 2,100 Variable manufacturing overhead 1,300 Depreciation 1,350 Insurance and property taxes 72,000 Budgeted cost of goods sold Budgeted selling and administrative expenses: 7,000 Salaries expense 2,000 Rent expense 1,100 Insurance expense 550 Depreciation expense 15,250 Supplies expense 263,500 Budgeted cash receipts from customers 41,000 Budgeted income tax expense Budgeted purchase and payment for capital expenditures (additional equipment) 43,000

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