Problem 9-6A (Part Level Submission) Krause Industries’ balance sheet at Decembe
ID: 2487074 • Letter: P
Question
Problem 9-6A (Part Level Submission)
Krause Industries’ balance sheet at December 31, 2013, is presented below.
KRAUSE INDUSTRIES
Balance Sheet
December 31, 2013
Assets
Current Assets
Cash
$7,500
Accounts receivable
82,500
Finished goods inventory (2,000 units)
33,740
Total current assets
$123,740
Property, Plant, and Equipment
Equipment
$41,870
Less: Accumulated depreciation
11,870
30,000
Total assets
$153,740
Liabilities and Stockholders' Equity
Liabilities
Notes payable
$26,870
46,870
Total liabilities
73,740
Stockholders' Equity
Common stock
$48,130
Retained earnings
31,870
Total stockholders' equity
80,000
Total liabilities and stockholders' equity
$153,740
Additional information accumulated for the budgeting process is as follows.
Budgeted data for the year 2014 include the following.
4th Qtr. of 2014
Year 2014 Total
To meet sales requirements and to have 3,000 units of finished goods on hand at December 31, 2014, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $20. Krause Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $12,042 for depreciation on equipment. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes.
All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2014, the company expects to purchase additional equipment costing $20,870. It expects to pay $9,870 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2014, include amounts due suppliers (see above) plus other accounts payable of $7,570. In 2014, the company expects to declare and pay an $6,870 cash dividend. Unpaid income taxes at December 31 will be $6,870. The company’s cash budget shows an expected cash balance of $7,950 at December 31, 2014.
please prepare a balance sheet
KRAUSE INDUSTRIES
Balance Sheet
December 31, 2013
Assets
Current Assets
Cash
$7,500
Accounts receivable
82,500
Finished goods inventory (2,000 units)
33,740
Total current assets
$123,740
Property, Plant, and Equipment
Equipment
$41,870
Less: Accumulated depreciation
11,870
30,000
Total assets
$153,740
Liabilities and Stockholders' Equity
Liabilities
Notes payable
$26,870
Accounts payable46,870
Total liabilities
73,740
Stockholders' Equity
Common stock
$48,130
Retained earnings
31,870
Total stockholders' equity
80,000
Total liabilities and stockholders' equity
$153,740
Explanation / Answer
Assets Note No. Amount Current Assets Cash Given 7950 Accounts Receivables 4 33600 Finished goods Inventory Given 60000 Total Current Assets 101550 Property, Plant and equipment 2 62740 Less: Accumulated Depreciation 1 23912.00 Total Non Current assets 38828 Total Assets 140378 Liabilities Current Liabilities Notes Payable 3 17000 Accounts Payable 5 14200 income Tax Payable given 6870 Total Liabilities 38070 Shareholder's equity Common Stock 48130 Retained Earnings 6 54178 Total Stockhoders equity 102308 Total Liabilities and Stockholders Equity 140378 Notes 1 It has been given Depreciation expense 12042 Accumulated at beginning 11870 Total at end 23912 2 Equipment purchased 20870 Opening Equipment 41870 Total 62740 3 Notes Payable Opening balance 26870 Paid during year 9870 Closing balance 17000 4 Accounts Receivable 40 % of last quarter Sale = 40 % of 84000 33600 5 Accounts Payable 50% of last quarter purchase = 50% of 13260 6630 Add: other accounts payable, given 7570 Total 14200 6 Retained Earnings Beginning 31870 Add: Net Income 29178 Less; Dividend paid 6870 = At end 54178
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