13-58 Comprehensive Budget Plan Panther Corporation appeared to be experiencing
ID: 2578483 • Letter: 1
Question
13-58 Comprehensive Budget Plan
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 450,000 units, and planned sales volume is 400,000 units. Sales and production volume was 300,000 units last year. The company uses a full-absorption costing and FIFO inventory system and is subject to a 40% income tax rate. The actual income statement for last year follows:
Required
Prepare a balance sheet.
Panther Corporation Expected Account Balances for December 31, Year 2 Cash $4,800 Accounts receivable $320,000 Inventory (January 1, year 2) $192,000 Plant and equipment $520,000 Accumulated depreciation $164,000 Accounts payable $180,000 Notes payable (due within one year) $200,000 Accrued payables $93,000 Common stock $280,000 Retained earnings $432,800 Sales revenue $2,400,000 Other income $36,000 Manufacturing costs: Materials $852,000 Direct labor $872,000 Variable overhead $520,000 Depreciation $20,000 Other fixed overhead $31,000 Marketing: Commissions $80,000 Salaries $64,000 Promotion and advertising $180,000 Administrative: Salaries $64,000 Travel $10,000 Office costs $36,000 Income taxes ------ Dividends $20,000 $3,785,800 $3,785,800Explanation / Answer
Balance sheet Cash 4800 Accounts receivable 320000 Inventory 192000 Total current assets 516800 Property plant and equipment Plant and equipment 520000 Accumulated depreciation -164000 356000 Total assets 872800 Liabilities and stockholders equity Current liabilities Accounts payable 180000 Notes payable 200000 Accrued payables 93000 Total current liabilities 473000 Stockholders equity Common stock 280000 Retained earnings 119800 Total stockholders equity 399800 Total liabilities and stockholders equity 872800
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.