To be completed using Excel. The Highlander Corporation Balance Sheet December 3
ID: 2515413 • Letter: T
Question
To be completed using Excel.
The Highlander Corporation
Balance Sheet
December 31, 2016
Assets
Cash
$ 6,595
Accounts Receivable
10,000
Finished Goods
(575 units x $7.00 per unit
4,025
Raw Materials
(2,760 square inches @ $0.50 per square inch)
1,380
Plant and Equipment
$ 60,000
Less: Accumulated Depreciation
15,000
45,000
Total Assets
67,000
Liabilities
Trade Accounts Payable
9,000
9,000
Stockholders’ Equity
Common Stock
33,000
Retained Earnings
25,000
Total Stockholders’ Equity
58,000
Total liabilities & Stockholders’ equity
$ 67,000
In preparation for developing the master budget for the first three months of 2017, the following has been extracted from the company’s accounting records
1 All sales are made on account at $25 per unit. Sixty Percent of the sales are collected in the month of sale, the remaining 40% are collected in the following month. Forecast sales for the first five months of 2017 are: January, 1,800 units; February, 2,000 units; March, 2,100 units; April, 2,000 units; May 2,200 units.
2Management wants to maintain the finished goods inventory at 30% of the following month’s sales.
3.Watson uses four square inches of direct materials in each finished unit. The direct material priceshave been stable and are expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month’s production needs.
4. 70% of all purchases are paid in the month of purchase; the remaining 30% are paid in the subsequent month.
5. Watson’s product requires 30 minutes of direct labor time. Each hour of direct labor costs $8. Additionally factory overhead is charged to products at a rate of $4 per labor hour.
6. Equipment depreciation for 2017(already included in the factory overhead) will be $6,000 ($500 per month).
7. No new equipment will be purchased and no new common stock will be issued during 2017.
8. Operating expenses, all paid in cash, are expected to be $2,500 in January and grow by 1% each month after that.
9. Beginning and ending Work-In-Process inventories are insignificant and can be ignored.
Prepare the following for January, February and March:
A. a schedule showing projected sales
B. a schedule of cash collections
C. a production budget
D. a direct materials budget
E. a schedule of cash disbursements for materials purchased
F. a combination direct labor and factory overhead budget
G. a cash budget (you may combine items B and E with this budget)
H. a budgeted income statement
I.a budgeted balance sheet
Each schedule should show budgets for January, February, and March (e.g. don’t put each month on a separate sheet, but each schedule, A to I, should be on a separate worksheet). You may omit a Quarter Total column or sheet. To the degree possible, each sheet should be linked to all related sheets. For example, the sales figures on your production budget should come from (be linked to) your sales budget
Cash
$ 6,595
Accounts Receivable
10,000
Finished Goods
(575 units x $7.00 per unit
4,025
Raw Materials
(2,760 square inches @ $0.50 per square inch)
1,380
Plant and Equipment
$ 60,000
Less: Accumulated Depreciation
15,000
45,000
Total Assets
67,000
Explanation / Answer
Solution A:
Solution B:
Solution C:
Solution D:
Note: I have answered sufficent parts as per chegg policy. Kindly post separate question for remaining parts.
Highlander Corporation Sales Budget For the first quarter of 2017 Particulars January Feburary March April Expected Sales Units 1800 2000 2100 2000 Unit Price $25.00 $25.00 $25.00 $25.00 Sales $45,000.00 $50,000.00 $52,500.00 $50,000.00Related Questions
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