Panther Corporation appeared to be experiencing a good year. Sales in the first

Question

Panther Corporation appeared to be experiencing a good year. Sales in the first quarter were one-third ahead of last year, and the sales department predicted that this rate would continue throughout the entire year. The controller asked Janet Nomura, a summer accounting intern, to prepare a draft forecast for the year and to analyze the differences from last year's results. She based the forecast on actual results obtained in the first quarter plus the expected costs of production to be completed in the remainder of the year. She worked with various department heads (production, sales, and so on) to get the necessary information. The results of these efforts follow:

  

  
Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 415,000 units, and planned sales volume is 365,000 units. Sales and production volume was 265,000 units last year. The company uses a full-absorption costing and FIFO inventory system and is subject to a 40 percent income tax rate. The actual income statement for last year follows:

  

Required:

PANTHER CORPORATION
Expected Account Balances for December 31, Year 2 Cash $ 6,100 Accounts receivable 333,000 Inventory (January 1, Year 2) 318,000 Plant and equipment 585,000 Accumulated depreciation $ 177,000 Accounts payable 193,000 Notes payable (due within one year) 213,000 Accrued payables 106,000 Common stock 410,000 Retained earnings 771,600 Sales revenue 2,530,000 Other income 62,000 Manufacturing costs Materials 963,000 Direct labor 987,000 Variable overhead 629,000 Depreciation 33,000 Other fixed overhead 44,000 Marketing Commissions 106,000 Salaries 77,000 Promotion and advertising 206,000 Administrative Salaries 77,000 Travel 16,500 Office costs 49,000 Income taxes — Dividends 33,000 $ 4,462,600 $ 4,462,600 E chapter 13 Homework v ? ? O ? ?ezto.mheducation.com/hm.tpx PANTHER CORPORATION Budgeted Income Statement For the Year Ended December 31, Year 2 Revenue Sales revenue Total Revenue Expenses Cost of goods manufactured & sold: Materials Direct labor Variable overhead Fixed overhead Beginning inventory Ending inventory Marketing Salaries Pror Administrative: Salaries Travel Office costs Income taxes (credit) Total expenses Operating profit (loss) O Type here to search 740 PM 6/11/2018 ?

Explanation / Answer

   PANTHER CORPORATION                                                                Budgeted Income Statement                                                      For the year ended December 31, Year 2 Revenue:       Sales Revenue    2,530,000       Other Income          62,000             Total Revenue    2,592,000 Expenses: Cost of goods manufactured and sold:       Materials       963,000       Direct labor       987,000       Variable Overhead       629,000       Fixed Overhead          77,000       Beginning Inventory       318,000       Ending Inventory     (659,200)    2,314,800 Marketing       Salaries          77,000       Commissions       106,000       Promotions and advertising       206,000       389,000 Administrative       Salaries          77,000       Travel          16,500       Office Costs          49,000       142,500 Income taxes (credit)        Total Expenses    2,846,300 Operating Profit(Loss)     (254,300)                      PANTHER CORPORATION                       Budgeted Balance Sheet                   Budgeted December 31, Year 2 Current Assets Cash          6,100 Inventory     659,200 Accounts Receivable     333,000 Total Current Assets       998,300 Plant and Equipment     585,000 Less: Accu. Depreciation (177,000)       408,000      Total Assets    1,406,300 Current Liabilities Accounts Payable     193,000 Notes Payable     213,000 Accrued Payables     106,000 Total Current Liabilities       512,000 Shareholders' Equity Common Stock     410,000 Retained Earnings     484,300 Total Shareholders' Equity       894,300 Total liabilities and shareholders' equity    1,406,300 Notes : Calculation of closing stock Units of opening stock Total Cost of goods manufactured - year 1    1,590,000 No of units produced       265,000 Cost per unit                    6 So no of units of opening stock = 318000/5 = 53,000 units Units of closing stock Opening stock          53,000 No of units manufactured       415,000 no of units sold     (365,000) Units of closing stock       103,000 Total cost of units manufactured    2,656,000 No of units produced       415,000 Cost per unit              6.40 No of units of closing stock       103,000 Value of closing stock       659,200

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.