Narrative OR Burdell, acting as GPB Inc., designs and creates wood kilned potter

Question

Narrative OR Burdell, acting as GPB Inc., designs and creates wood kilned pottery to sell hr ough a time/ piece. The local craft shop charges a 10% c GPB Inc., at the end of December. George has finished and sold 300 pieces each year the past two years and expects to sell 350 pieces this year. He has enough cla inventory to make 350 sets. He paid $17 per piece for the clay. George L0gin local craft shop. Because this is a hobby, George does not consider labor costs in his financials. The pottery sells at an average market price for $150 per ouble Logging In ommission and remits the net proceeds to fo y in uses a Wood- er KD 15o Lumber Kiln that he purchased for cash exactly two years ago. The kiln is depreciated at the rate of $100 per month. The Accounts Payable balance relates to the clay inventory and is payable by September 30. George is considering buying a Wood-Mizer KD 250 Lumber Kiln so that he can produce more intricate patterns in clay and more pieces per burn. The new kiln costs $6,600 and would be depreciated at $180 per month. His bank has agreed to lend hin $6,600 at % interest per year, with $2,200 payment of principal, plus accrued interest payable each December 31. George believes he can produce 300 products with more intricate patterns in time for the Christmas rush if he does not produce any of the other pie $200. Clay costs $28 per piece. George's supplier will sell him clay on credit, payable December 31. e predicts that each more intricate designed piece will sell for and average price of George plans to keep his old kiln whether or not he buys the new kiln. The balance sheet for his pottery business at August 31, 2017, is as follows:

Explanation / Answer

GPB Inc Cash Budget ending four month ending on December 31, 2017 Existing Kiln(Wood Mizer KD 150) New Kiln(Wood Mizer KD 250) Existing Kiln(Wood Mizer KD 150) New Kiln(Wood Mizer KD 250) Beginning Cash Balance 1274 1274 Receipt from Sales 47250 54000 Receipt from Sales Loan from Bank 6600 No. of pottery 350 300 Total Receipts 48524 61874 Average price 150 200 52500 60000 Payment towards clay inventory 6460 6460 Less : Commission 5250 6000 Payment towards clay inventory 8400 47250 54000 Purchase of Wood Mizer Kd 250 6600 Repayment of Loan principal 2200 Payment of Interest on Loan 198 Interest on Loan =6600*9%*4/12 Total Payment 6460 23858 198 Ending Cash balance 42064 38016 Budgeted Income statement for the four month ending December 31, 2017 Existing Kiln(Wood Mizer KD 150) New Kiln(Wood Mizer KD 250) Existing Kiln(Wood Mizer KD 150) New Kiln(Wood Mizer KD 250) Payment for Clay Inventory Revenue from sales 52500 60000 No. of pottery 350 300 Less : Average price 17 28 Cost of goods sold 5950 8400 5950 8400 Depreication on Kiln 400 1120 Interest on Loan 198 Commission on sales 5250 6000 Total expenses 11600 15718 Net Income 40900 44282 Balance sheet at December 31, 2017 Existing Kiln(Wood Mizer KD 150) New Kiln(Wood Mizer KD 250) Existing Kiln(Wood Mizer KD 150) New Kiln(Wood Mizer KD 250) Asset Accumulated depreication Cash 42064 38016 Beginning Balance 2400 2400 Inventory 0 5950 Add : Depreciation on Wood Mizer KD 150 Total current Asset A 42064 43966 400 400 Property , Plant & Equipment 3300 9900 Add : Depreciation on Wood Mizer KD 250 Less : Accumulated Depreciation 2800 3520 720 Total PP & E B 500 6380 2800 3520 Total Asset A+B 42564 50346 Liabilities Current Liabilties Accounts Payable 0 0 Total Current Liabilties 0 0 Non Current liabilties Loans from Bank 4400 Total Non current liabilties 4400 Stockholder's equity Retained earnings Beginning 1664 1664 Add : Net Income 40900 44282 Total Liabilities & Stockholder's equity 42564 50346 As per policy of chegg we can not answer more than 1 question at a time We appreciate the rating of our answers Thank You

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