KRAUSE INDUSTRIES Balance Sheet December 31, 2016 Assets Current Assets Cash $7,
ID: 2579104 • Letter: K
Question
KRAUSE INDUSTRIES
Balance Sheet
December 31, 2016
Assets
Current Assets
Cash
$7,500
Accounts receivable
73,500
Finished goods inventory (1,500 units)
26,050
Total current assets
107,050
Property, Plant, and Equipment
Equipment
$40,430
Less: Accumulated depreciation
10,090
30,340
Total assets
$137,390
Liabilities and Stockholders' Equity
Liabilities
Notes payable
$27,380
46,330
Total liabilities
73,710
Stockholders' Equity
Common stock
$37,540
Retained earnings
26,140
Total stockholders' equity
63,680
Total liabilities and stockholders' equity
$137,390
Quarter 4
Total
(a)
Krause Industries’ balance sheet at December 31, 2016, is presented below.KRAUSE INDUSTRIES
Balance Sheet
December 31, 2016
Assets
Current Assets
Cash
$7,500
Accounts receivable
73,500
Finished goods inventory (1,500 units)
26,050
Total current assets
107,050
Property, Plant, and Equipment
Equipment
$40,430
Less: Accumulated depreciation
10,090
30,340
Total assets
$137,390
Liabilities and Stockholders' Equity
Liabilities
Notes payable
$27,380
Accounts payable46,330
Total liabilities
73,710
Stockholders' Equity
Common stock
$37,540
Retained earnings
26,140
Total stockholders' equity
63,680
Total liabilities and stockholders' equity
$137,390
Budgeted data for the year 2017 include the following.
2017
Quarter 4
Total
Sales budget (8,000 units at $32) $76,800 $256,000 Direct materials used 13,570 62,500 Direct labor 12,500 50,900 Manufacturing overhead applied 10,000 49,270 Selling and administrative expenses 16,660 75,000To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2017, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $18. Krause uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes. In 2017, the company expects to declare and pay an $10,560 cash dividend.
The company’s cash budget shows an expected cash balance of $5,880 at December 31, 2017. 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 2017, the company expects to purchase additional equipment costing $11,900. $9,437 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Krause expects to pay $9,260 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2017, includes amounts due suppliers (see above) plus other accounts payable of $8,250. Unpaid income taxes at December 31 will be $7,860.
Explanation / Answer
Budgeted statement of cost of goods sold: Particulars Amount ($) Direct materials used 62500 Direct labor used 50900 Overhead 49270 Budgeted manufacturing costs 162670 Add:Beginning finished goods 26050 Goods available for sale 188720 Less:Ending finished goods (2500*18) 45000 Budgeted cost of goods sold 143720
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.