Concept explainers
Preparing a financial budget−
Learning Objective 4
1. NI $166,100
2. FG inventory $3,150
Bradley Company has the following post-closing
BRADLEY COMPANY Post-Closing Trial Balance December 31, 2018 |
||
Account | Debit | Credit |
Cash | $15,000 | |
23,200 | ||
Raw Materials Inventory | 11,000 | |
Finished Goods Inventory | 25,900 | |
Equipment | 125,000 | |
$35,000 | ||
Accounts Payable | 13,600 | |
Common Stock | 150,000 | |
1,500 | ||
Totals | $200,100 | $200,100 |
The company’s accounting department has gathered the following budgeting information for the first quarter of 2019:
Budgeted total sales, all on account | $305,000 |
Budgeted direct materials to be purchased and used | 32,000 |
Budgeted direct labor cost | 12,500 |
Budgeted |
|
Variable manufacturing overhead | 2,100 |
Depreciation | 1,300 |
Insurance and property taxes | 1,350 |
Budgeted selling and administrative expenses: | |
Salaries expense | 7,000 |
Rent expense | 2,000 |
Insurance expense | 1,100 |
Depreciation expense | 550 |
Supplies expense | 15,250 |
Budgeted cash receipts from customers | 263,500 |
Budgeted income tax expense | 41,000 |
Budgeted purchase and payment for capital expenditures (additional equipment) | 43,000 |
Additional information:
a. Direct materials purchases are paid 70% in the quarter purchased and 30% ii the next quarter.
b. Direct labor, manufacturing overhead, selling and administrative costs, and income tax expense are paid in the quarter incurred.
c. 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.
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Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)
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