Accounting $102$ Budget Project

Hitchen$$s Widget store Part $2$

Using Hitchen$$s info from the income statement budgets $($part $1),$ the remaining account info is presented to prepare the components of the balance sheet budgets. Assume the same budget is expected for the next three months $($July$,$ Aug, Sept$).$

$1.$ Opening July $1$ cash balance is $$578,879.$

$2.$ A$/$R beginning balance of $$2,133,435$ was $66\%$ collected in July and the remaining in August.

$3.$ Sales: $30\%$ collected in month of sale, $50\%$ the following month, and $20\%$ in the third month.

$4.$ A$/$P opening balance of $$297,454$ was paid $70\%$ this month and $30\%$ next month.

$5.$ Direct Materials are paid $30\%$ during month of purchase, $50\%$ the following month, and $20\%$ the third month.

$6.$ W$/$P had an opening balance of $$222,786$ and paid off this month

$7.$ Direct Labor is paid $73\%$ this month and the remaining in the following month.

$8.$ Factory Overhead & Selling$/$Admin is paid $100\%$ this month $($excluding Depreciation$)$

$9.$ Dividends are expected to be paid of $$179,223,$ $$240,000,$ and $$260,000$ in the three months respectively

$10.$ Plans are in place to purchase a piece of equipment for $$143,567$ in month $1(10\%$ paid this month, $40\%$ paid in month $2$ and the remaining $50\%$ in month $3).$

a$.$ Retired Asset expected to sell for $$11,232$ and collected $100\%$ in the second month.

$11.100\%$ of income tax is paid each month

$12.$ Beginning balances:

a$.$ Equipment $=2,164,000$

b$.$ Accum. Dep. Equipment $=1,256,000$

c$.$ Common Stock $=$ $$2,500,000$

d$.$ Retained Earnings $=$ $$1,114,081$

Prepare these following budgets for month one, two and three.

$1.$ Schedule of cash collections from customers

$2.$ Schedule of cash payments for D$.$M$.$

$3.$ Schedule of cash payments for D$.$L$.$

$4.$ Cash Budget

$5.$ Budgeted balance sheet $($as of month $1)$

The following information was provided by Hitchen$$s widget store for July $31,202$X$.$ They make two products: R$2$D$2$ & C$3$P$0.$ Both items use $2$ of the $3$ listed materials: Nada, Yada, and Bozo.

Presented below is monthly sales data for the two balls

R$2$D$2$ C$3$P$0$

Expected unit sales $7,46511,345$

Expected price$/$unit $$233$ $$154$

Beginning product inventory $700$ units $300$ units

Desired ending product inventory $500$ units $500$ units

Direct materials $-$ R$2$D$2$ uses Nada and C$3$P$0$ uses Yada for production. Both products require a Bozo.

Nada $($R$2$D$2$ only$)$ Yada $($C$3$P$0$ only$)$ Bozo $($both products$)$

Material $/$ unit $6\mathrm{.}15$ft $4\mathrm{.}75$ ft $1$ unit

Beginning DM Inv. $9,600$ ft $6,200$ ft $450$

Ending DM Inv $4,000$ ft $8,000$ ft $300$

Costs are $$4\mathrm{.}22$per foot of Nada

Costs are $$2\mathrm{.}75$per foot of Yada

Bozo$$s cost $$7\mathrm{.}85$ each

Direct Labor $-$ Each product requires the time listed below. R$2$D$2$ C$3$P$0$

Process #$12\mathrm{.}2$hours$/$unit $1$hour$/$unit Paid $$14\mathrm{.}35/$hr

Process #$22\mathrm{.}5$ hours$/$unit $1\mathrm{.}5$ hours$/$ unit Paid $$18/$hr

Factor Overhead is broken into variable and fixed costs. Variable costs are estimated by D$.$L hour of Process #$1.$ Fixed Costs are divided based on percent of Process #$1$ hours.

Variable Fixed

Indirect Materials $($$$3\mathrm{.}5/$hr$)$ Supervisor salary $$97,000$

Indirect Labor $($$$4\mathrm{.}8/$hr$)$ Depreciation $$55,432$

Utilities $($$$2\mathrm{.}55/$hr$)$ Property taxes and ins. $$48,500$

Other Selling and Admin Expenses not listed above

Advertising $$167,597$

Sales salaries $489,000$

Office salaries $136,000$

Income Tax percentage $=30\%$

Instructions:

Using the attached template fill$-$in sheet, complete all income statement budgets. Show all work for each budget Hitchen's Widget Store $-$ Part $1$