(TCO 2) Rossi Company has the following projected account balances for June, 20X
ID: 2354451 • Letter: #
Question
(TCO 2) Rossi Company has the following projected account balances for June, 20X9 Accounts payable $60,000 Sales $800,0 00 Accounts receivable $120,000 Capital Stock $420,000 Depreciation, factory $24,000 Retained Earnings ? Inventories (5/31 & 6/30) $180,000 Cash $56,000 Direct materials used $210,000 Equipment, net $260,000 Office salaries $92,000 Building, net $400,000 Insurance, factory $4,000 Utilities, factory $16,000 Plant wages $140,00 Selling expenses 50,000 Bonds Payable $160,000 Maintenance Factory $28,000 Prepare a budgeted income statement and budgeted balance sheet as of June 30, 20X9Explanation / Answer
Income statement
sales
800,000
cost of goods sold:
direct materials used
210,000
Plant wages
140,000
Depreciation, factory
24,000
Insurance, factory
4,000
Utilities, factory
16,000
Maintenance, factory
28,000
cost of goods sold
422,000
gross margin
378,000
administrative and selling:
office salaries
92,000
selling expenses
50,000
total admin and selling
142,000
net income
236,000
Balance sheet:
Assets
cash
56,000
AR
120,000
inventories
180,000
equipment
260,000
building
400,000
Total assets
1,016,000
Liabilities
AP
60,000
bonds payable
160,000
total liabilities
220,000
Equity
capital stock
420,000
retained earnings
376,000
total equity
796,000
total liabilities and stockholders equity
1,016,000
Income statement
sales
800,000
cost of goods sold:
direct materials used
210,000
Plant wages
140,000
Depreciation, factory
24,000
Insurance, factory
4,000
Utilities, factory
16,000
Maintenance, factory
28,000
cost of goods sold
422,000
gross margin
378,000
administrative and selling:
office salaries
92,000
selling expenses
50,000
total admin and selling
142,000
net income
236,000
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