I HAVE TWO SPOTS WITH QUESTION MARKS IN THE BELOW BUDGETED BALANCE SHEET THAT I
ID: 2456221 • Letter: I
Question
I HAVE TWO SPOTS WITH QUESTION MARKS IN THE BELOW BUDGETED BALANCE SHEET THAT I NEED HELP FIGURING OUT.
Budgeted Income Statement and Balance Sheet
As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Regina Soap Co.:
Cash
$ 85,000
Accounts Receivable
125,600
Finished Goods
69,300
Work in Process
32,500
Materials
48,900
Prepaid Expenses
2,600
Plant and Equipment
325,000
Accumulated Depreciation—Plant and Equipment
$156,200
Accounts Payable
62,000
Common Stock, $10 par
180,000
Retained Earnings
290,700
$688,900
$688,900
Factory output and sales for 2017 are expected to total 200,000 units of product, which are to be sold at $5.00 per unit. The quantities and costs of the inventories at December 31, 2017, are expected to remain unchanged from the balances at the beginning of the year.
Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:
Estimated Costs and Expenses
Fixed
(Total for Year)
Variable
(Per Unit Sold)
Cost of goods manufactured and sold:
Direct materials
_
$1.10
Direct labor
_
0.65
Factory overhead:
Depreciation of plant and equipment
$40,000
_
Other factory overhead
12,000
0.40
Selling expenses:
Sales salaries and commissions
46,000
0.45
Advertising
64,000
_
Miscellaneous selling expense
6,000
0.25
Administrative expenses:
Office and officers salaries
72,400
0.12
Supplies
5,000
0.10
Miscellaneous administrative expense
4,000
0.05
Balances of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of $30,000 on 2017 taxable income will be paid during 2017. Regular quarterly cash dividends of $0.15 per share are expected to be declared and paid in March,
Cash
$ 85,000
Accounts Receivable
125,600
Finished Goods
69,300
Work in Process
32,500
Materials
48,900
Prepaid Expenses
2,600
Plant and Equipment
325,000
Accumulated Depreciation—Plant and Equipment
$156,200
Accounts Payable
62,000
Common Stock, $10 par
180,000
Retained Earnings
290,700
$688,900
$688,900
June, September, and December on 18,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $75,000 cash in May. 2. Prepare a budgeted balance sheet as of December 31, 2017. Regina Soap Co. Budgeted Balance Sheet December 31, 2017 Assets Current assets: Cash 135,800 Accounts receivable 125,600 nventories: Finished goods Work in process Materials Prepaid expenses Total current assets 69,300 32,500 48,900 2,600 414,700 Property, plant, and equipment: Plant and equipment Less accumulated depreciation 400,000 196,200 Total assets 618,500 Liabilities Current liabilities: Accounts payable 62,000 Stockholders' Equity Common stock 180,000 Retained earnings 376,500 Total stockholders' equity 556,500 otal liabilities and stockholders' equity 618,500Explanation / Answer
Inventory = Raw material +WIP + Fg
= 69300+32500+48900
= 150,700
Plant ,property =plant -accumulated depreciation
= 400000-196200
=203800
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