Concept explainers
Preparing the financial budget—budgeted
Learning Objective 4 FG inventory $3,150 |
Barker, Inc. has the following balance sheet at December 31, 2018:
BARKER, INC.Balance SheetDecember 31, 2018 | ||
Assets | ||
Current Assets | ||
Cash | $2,400 | |
1,400 | ||
Raw Materials Inventory | 500 | |
Finished Goods Inventory | 1,350 | |
Total Current Assets | $5,650 | |
Property, Plant, and Equipment: | ||
Equipment | 16,000 | |
Less: |
(1,500) | 14,500 |
Total Assets | $20,150 | |
Liabilities | ||
Current Liabilities: | ||
Accounts Payable | $1,000 | |
Common Stock, no par | $6,500 | |
12,650 | ||
Total Stockholders’ Equity | 19,150 | |
Total Liabilities and Stockholders’ Equity | $20,150 |
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
Depreciation on manufacturing equipment, $800
Cost of goods sold, $14,800
Selling and administrative costs incurred and paid, $500
Purchase of equipment, paid in 2019, $2,000
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
Want to see the full answer?
Check out a sample textbook solutionChapter 22 Solutions
EBK HORNGREN'S ACCOUNTING
- equired information Skip to question [The following information applies to the questions displayed below.] Endless Mountain Company manufactures a single product that is popular with outdoor recreation enthusiasts. The company sells its product to retailers throughout the northeastern quadrant of the United States. It is in the process of creating a master budget for 2022 and reports a balance sheet at December 31, 2021 as follows: Endless Mountain Company Balance Sheet December 31, 2021 Assets Current assets: Cash $ 46,200 Accounts receivable (net) 260,000 Raw materials inventory (4,500 yards) 11,250 Finished goods inventory (1,500 units) 32,250 Total current assets $ 349,700 Plant and equipment: Buildings and equipment 900,000 Accumulated depreciation (292,000 ) Plant and equipment, net 608,000 Total assets $ 957,700 Liabilities and…arrow_forwardCompleting a comprehensive budgeting problem—merchandising Company Alliance Printing Supply of Baltimore has applied for a loan. Its bank has requested a budgeted income statement for April 2018 and a balance sheet at April 30, 2018. The March 31, 2018, balance sheet follows: As Alliance Printing Supply’s controller, you have assembled the following additional information: April dividends of $7,000 were declared and paid. April capital expenditures of $16,300 budgeted for cash purchase of equipment. April depreciation expense, $1,000. Cost of goods sold, 40% of sales. Desired ending inventory for April is $22,400. April selling and administrative expenses include salaries of $37,000, 30% of which will be paid in cash and the remainder paid next month. Additional April selling and administrative expenses also include miscellaneous expenses of 10% of sales, all paid in April. April budgeted sales, $89,000, 80% collected in April and 20°/0 in May. April cash payments of March 31…arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 76,000 Accounts receivable 137,000 Inventory 86,100 Plant and equipment, net of depreciation 230,000 Total assets $ 529,100 Liabilities and Stockholders’ Equity Accounts payable $91,000 Common stock 312,000 Retained earnings 126,100 Total liabilities and stockholders’ equity $ 529,100 Beech’s managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and October will be $410,000, $430,000, $420,000, and $440,000, respectively. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the…arrow_forward
- Completing a comprehensive budgeting problem—merchandising company Belton Printing Company of Baltimore has applied for a loan. Its bank has requested a budgeted income statement for the month of April 2018 and a balance sheet at April 30, 2018. The March 31, 2018a balance sheet follows: As Belton Printings controller, you have assembled the following additional information: April dividends of $7,000 were declared and paid. April capital expenditures of $17,000 budgeted for cash purchase of equipment. April depreciation expense, $800. Cost of goods sold, 55% of sales. Desired ending inventory For April is $24,800. April selling and administrative expenses includes salaries of $29,000, 20% of which Will be paid in cash and the remainder paid next month. Additional April selling and administrative expenses also include miscellaneous expenses of 10% of sales, all paid in April. April budgeted sales, $86,000, 80% collected in April and 20% in May. April cash payments of March 31…arrow_forwardeBook Show Me How Print Item Question Content Area Budget Performance Reports for Cost Centers Partially completed budget performance reports for Garland Company, a manufacturer of light duty motors, follow: Garland CompanyBudget Performance Report—Vice President, ProductionFor the Month Ended November 30 Plant Budget Actual Over Budget Under Budget Eastern Region $2,300,000 $2,287,900 $(12,100) Central Region 3,000,000 2,988,400 (11,600) Western Region (g) (h) (i) $(j) $(k) $(l) $(23,700) Garland CompanyBudget Performance Report—Manager, Western Region PlantFor the Month Ended November 30 Department Budget Actual Over Budget Under Budget Chip Fabrication $(a) $(b) $(c) Electronic Assembly 700,000 703,200 3,200 Final Assembly 525,000 516,600 $(8,400) $(d) $(e) $(f) $(8,400) Garland CompanyBudget Performance Report—Supervisor, Chip FabricationFor the Month Ended…arrow_forwardnot graded... please help Prepare Cash Budget from Budgeted Transactions Prepare a cash budget for the month ended May 31, 2019. Campton Company anticipates a cash balance of $74,000 on May 1, 2019. The following budgeted transactions for May 2019 present data related to anticipated cash receipts and cash disbursements: 1. For May, budgeted cash sales are $50,000 and budgeted credit sales are $490,000. (Credit sales for April were $450,000.) In the month of sale, 40% of credit sales are collected, with the balance collected in the month following sale. 2. Budgeted merchandise purchases for May are $270,000. (Merchandise purchases in April were $240,000.) In the month of purchase, 70% of merchandise purchases are paid for, and the balance is paid for in the following month. 3. Budgeted cash disbursements for salaries and operating expenses for May total $155,000. 4. During May, $25,000 of principal repayment and $4,000 of interest payment are due to the bank. 5. A $20,000 income…arrow_forward
- ICE TASK 4 – Budgeting Techniques The University of Africa requires all second-year engineering students to have their own laptop computers to do practical work and tasks. During the last quarter of 2022, a private company, Laptops for Students Proprietary Limited (“LFS”) was established to supply laptops according to the specifications set by the university, at affordable prices. At that time, a loan of R800 000 was granted to LFS and the funds were deposited into the bank account. Prior to the receipt of the loan amount no cash transactions occurred. The following additional information is available for LFS: According to estimates, 200 of the 400 second year engineering students will buy their laptops from LFS. There are two types of laptops which will be supplied, namely Exceptional at a selling price of R10 000 and Superior at a selling price of R8 000. Since the Exceptional laptop has a more powerful hard drive, it is expected that 60% of the 200 students will prefer to…arrow_forwardQuestion Question The management accountant at Miller Merchandising & More, Odail Russell is in the process ofpreparing the cash budget for the business for the fourth quarter of 2021. It is customary for thebusiness to borrow money during this quarter. Extracts from the sales and purchases budgets areas follows:Month cash sales sales on account purchasesAugust $85,000 $640,000 $420,000September $70,000 $550,000 $550,000October $88,550 $600,000 $500,000November $77,160 $800,000 $600,000December $174,870 $500,000 $450,000 ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms –2/30, n60:60% in the month in which the inventory is purchased40% in the following month Required:(a)…arrow_forwardProblem 07-4A Manufacturing: Preparation of a complete master budget LO P1, P2, P3 The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019. ZIGBY MANUFACTURINGEstimated Balance SheetMarch 31, 2019 Assets Cash $ 54,000 Accounts receivable 354,375 Raw materials inventory 100,495 Finished goods inventory 333,000 Total current assets 841,870 Equipment 628,000 Accumulated depreciation (164,000 ) Equipment, net 464,000 Total assets $ 1,305,870 Liabilities and Equity Accounts payable $ 212,195 Short-term notes payable 26,000 Total current liabilities 238,195 Long-term note payable 514,000 Total liabilities 752,195 Common stock 349,000 Retained earnings 204,675 Total stockholders’ equity 553,675 Total liabilities and equity $ 1,305,870 To prepare a master budget for April, May, and June…arrow_forward
- A company has completed the operating budget and the cash budget. It is now preparing the budgeted balance sheet. Please use the below image as your guide for the next 5 questions. Identify the document that contains equipment purchases A B C D Earrow_forwardtask 1 Prepare the following budgets for the year 2021: - a. Sales budget. Show total sales by quarter and in total for the year. b. Production budget. Show total production unit by quarter and in total for the year. c. Direct material usage and purchase budget. d. Direct labour budget. task 2 Based Jaka’s experience, fifty percent (50%) of sales are paid in cash. Of the sales on account, seventy percent (70%) are collected in the quarter of sale; the remaining thirty percent (30%) are collected in the quarter following the sale. Total sales for the fourth quarter of 2020 totaled RM2,000,000. Required: Refer to the sales budget prepared in Task 1. Construct a cash receipts budget including an accounts receivable aging schedule for Jaka Sdn Bhd for each quarter of year 2021.arrow_forwardeBook Print Item Question Content Area Relevant data from the Poster Company’s operating budgets are: Quarter 1 Quarter 2 Sales $208,470 $211,539 Direct material purchases 115,290 120,831 Direct labor 75,200 73,300 Manufacturing overhead 25,400 25,200 Selling and administrative expenses 33,400 33,400 Depreciation included in selling and administrative 1,500 1,100 Collections from customers 215,392 240,154 Cash payments for purchases 114,300 119,252 Additional data:Capital assets were sold in January for $11,000 and $4,500 in May.Dividends of $4,600 were paid in February. The beginning cash balance was $60,360 and a required minimum cash balance is $58,000. Use this information to prepare a cash budget for the first two quarters of the year: If an amount box does not require an entry, leave it blank. The Poster CompanyCash BudgetFor the First Two Quarters Quarter 1 Quarter 2 $- Select - $- Select - Add: Cash Receipts - Select - -…arrow_forward