Lily Industries' balance sheet at December 31, 2024, is presented below. LILY INDUSTRIES Balance Sheet December...

Transcribed Image Text:

Lily Industries' balance sheet at December 31, 2024, is presented below. LILY INDUSTRIES Balance Sheet December 31, 2024 Current Assets Assets Cash Accounts receivable Finished goods inventory (1,650 units) Total current assets Property, Plant, and Equipment Equipment Less: Accumulated depreciation Total assets Liabilities Notes payable Accounts payable Total liabilities Stockholders' Equity Common stock $8,250 80,850 26,400 115,500 $44,000 11,000 33,000 $148,500 Liabilities and Stockholders' Equity Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Budgeted data for the year 2025 include the following. $27,500 49,500 77,000 $44,000 27,500 71,500 $148,500 2025 Quarter 4 Sales budget (9,400 units at $32) $90,240 Total $300,800 Direct materials used 18,700 68,750 Direct labor 13,750 55,990 Manufacturing overhead applied 11,000 53,460 Selling and administrative expenses 19,800 82,500 To meet sales requirements and to have 2,750 units of finished goods on hand at December 31, 2025, the production budget shows 9,900 required units of output. The total unit cost of production is expected to be $18. Lily uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,850 for the year. Income taxes are expected to be 20% of income before income taxes. In 2025, the company expects to declare and pay an $8,800 cash dividend. The company's cash budget shows an expected cash balance of $27,704 at December 31, 2025. 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 2025, the company expects to purchase additional equipment costing $9,900. A total of $4,550 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Lily expects to pay $8,800 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $3,850, above). Accounts payable at December 31, 2025, includes amounts due suppliers (see above) plus other accounts payable relating to manufacturing overhead of $7,920. Unpaid income taxes at December 31 will be $5,500. (b) Prepare a budgeted multiple-step income statement for 2025. LILY INDUSTRIES Budgeted Income Statement eTextbook and Media Save for Later Attempts: 0 of 2 used Submit Answer Lily Industries' balance sheet at December 31, 2024, is presented below. LILY INDUSTRIES Balance Sheet December 31, 2024 Current Assets Assets Cash Accounts receivable Finished goods inventory (1,650 units) Total current assets Property, Plant, and Equipment Equipment Less: Accumulated depreciation Total assets Liabilities Notes payable Accounts payable Total liabilities Stockholders' Equity Common stock $8,250 80,850 26,400 115,500 $44,000 11,000 33,000 $148,500 Liabilities and Stockholders' Equity Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Budgeted data for the year 2025 include the following. $27,500 49,500 77,000 $44,000 27,500 71,500 $148,500 2025 Quarter 4 Sales budget (9,400 units at $32) $90,240 Total $300,800 Direct materials used 18,700 68,750 Direct labor 13,750 55,990 Manufacturing overhead applied 11,000 53,460 Selling and administrative expenses 19,800 82,500 To meet sales requirements and to have 2,750 units of finished goods on hand at December 31, 2025, the production budget shows 9,900 required units of output. The total unit cost of production is expected to be $18. Lily uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,850 for the year. Income taxes are expected to be 20% of income before income taxes. In 2025, the company expects to declare and pay an $8,800 cash dividend. The company's cash budget shows an expected cash balance of $27,704 at December 31, 2025. 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 2025, the company expects to purchase additional equipment costing $9,900. A total of $4,550 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Lily expects to pay $8,800 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $3,850, above). Accounts payable at December 31, 2025, includes amounts due suppliers (see above) plus other accounts payable relating to manufacturing overhead of $7,920. Unpaid income taxes at December 31 will be $5,500. (b) Prepare a budgeted multiple-step income statement for 2025. LILY INDUSTRIES Budgeted Income Statement eTextbook and Media Save for Later Attempts: 0 of 2 used Submit Answer