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1. (TCO 2) Gardenia Company has the following projected account balances for Jun

ID: 2500063 • Letter: 1

Question

1. (TCO 2) Gardenia Company has the following projected account balances for June 30, 20X9:

Accounts payable              

$60,000

Sales                   

$800,000

Accounts receivable         

$100,000

Capital stock              

$400,000

Depreciation, factory           

$36,000

Retained earnings              

   ?

Inventories (5/31 & 6/30)      

$180,000

Cash                      

$56,000

Direct materials used        

$200,000

Equipment, net     

$240,000

Office salaries                  

$80,000

Buildings, net       

$400,000

Insurance, factory            

$4,000

Utilities, factory         

$16,000

Plant wages                       

$140,000

Selling expenses        

$50,000

Bonds payable                 

$160,000

Maintenance, factory      

$28,000


Prepare a budgeted income statement AND a budgeted balance sheet as of June 30, 20X9. (Points : 25)

Accounts payable              

$60,000

Sales                   

$800,000

Accounts receivable         

$100,000

Capital stock              

$400,000

Depreciation, factory           

$36,000

Retained earnings              

   ?

Inventories (5/31 & 6/30)      

$180,000

Cash                      

$56,000

Direct materials used        

$200,000

Equipment, net     

$240,000

Office salaries                  

$80,000

Buildings, net       

$400,000

Insurance, factory            

$4,000

Utilities, factory         

$16,000

Plant wages                       

$140,000

Selling expenses        

$50,000

Bonds payable                 

$160,000

Maintenance, factory      

$28,000

Explanation / Answer

Answer:

Budgeted Income Statement Particulars Amount ($) Sales 800000 COGS: Depreciation 36000 Materials used 200000 Insurance 4000 Wages 140000 Utilities 16000 Maintenance 28000 424000 Gross profit 376000 Operating expenses: Selling expenses 50000 Office salaries 80000 130000 Net income 246000