Pun Corporation makes construction cranes. During the past few days, the company's accountants have been preparing the master budget for 2010. To date, they have gathered the following projected data:

For the Year Ended December 31, 2010:

Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$20,254,400

Selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,896,000

Ending finished goods inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235,200

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134,400

Beginning finished goods inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,400

Direct materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5,000,000

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6,188,800

Manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,568,000

Account Balances at December 31, 2010:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$896,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,000

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834,400

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,008,000

Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .716,800

Accumulated depreciation'equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179,200

Accumulated depreciation'buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000

Direct materials inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212,800

Finished goods inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235,200

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,480

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,400,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .?

Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80,000

Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000

Other Information:

Dividends to be declared and paid during 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,303,680

Income tax rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30%

In addition, last year's balance sheet was as follows:

Required:
1. Prepare a pro-forma income statement for 2010.
2. Prepare a pro-forma balance sheet as of December 31, 2010.
3. Prepare a pro-forma statement of cash flows for 2010 (indirectmethod).

Transcribed Image Text:

Pun Corporation Balance Sheet December 31, 2009 Assets $ 379,200 90,800 180,000 246,400 672,000 Cash Accounts receivable Direct materials inventory Finished goods inventory Land S 896,000 (100,000) Ş 649,600 (120,000) Buildings Less accumulated depreciation Equipment. Less accumulated depreciation. Total assets 796,000 529,600 $2,894,000 Liabilities and Stockholders' Equity Liabilities: Accounts payable Income taxes payable. Total liabilities $ 150,000 450,000 $ 600,000 Stockholders' Equity: Common stock. S1,400,000 80,000 814,000 Paid-in capital in excess of par, common stock Retained earnings. Total stockholders' equity Total liabilities and stockholders' equity 2,294,000 52,894,000