Royal Bank of America has asked Maquire and Ferlow Ltd. for a budgeted balance sheet for the
Question:
Royal Bank of America has asked Maquire and Ferlow Ltd. for a budgeted balance sheet for the
year ended December 31, 2016. The following information is available:
1.
The cash budget shows an expected cash balance of $26,000 at December 31, 2016.
2.
The 2016 sales budget shows total annual sales of $500,000. All sales are made on
account and accounts receivable at December 31, 2016 are expected to be 8% of annual
sales.
3.
The merchandise purchases budget shows budgeted cost of goods sold for 2016 of
$210,000 and ending merchandise inventory of $21,000. 20% of the ending inventory is
expected to have not yet been paid at December 31, 2016.
4.
The December 31, 2015 balance sheet includes the following balances: Equipment
$127,000, Accumulated Depreciation $52,000, Common Stock $68,000, and Retained
Earnings $21,000.
5.
The budgeted income statement for 2016 includes the following: depreciation on equipment
$6,000, federal income taxes $21,000, and net income $41,800. The income taxes will not
be paid until 2017.
6.
In 2016, management does not expect to purchase additional equipment or to declare any
dividends. It does expect to pay all operating expenses, other than depreciation, in cash.
Instructions
Prepare an unclassified budgeted balance sheet at December 31, 2016.
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura