Peyton Approved Budgeted Balance Sheet 30-Jun-15 ASSETS Cash $42,000 Accounts receivable 259,900 Raw materials inventory 35,650 Finished goods inventory 241,080 Total current assets 578,630 Equipment $720,000 Less accumulated depreciation 240,000 480,000 Total assets $1,058,630 LIABILITIES AND EQUITY Accounts payable $63,400 Short-term notes payable 24,000 Taxes payable 10,000 Total current liabilities 97,400 ong-term note payable 300,000 Total Liabilities 397,400 Common stock $600,000 Retained earnings 61,230 Total stockholders’ equity 661,230 Total liabilities and equity $1,058,630 1. Sales were 20,000 units in June 2014. Forecasted sales in units are as follows: July, 19,000; August, 21,000; September, 20,000; October, 24,000.
The product’s selling price is $17.50 per unit and its total product cost is $14.35 per unit. 2. The June 30 finished goods inventory is 14,700 units. 3. Going forward, company policy calls for a given month’s ending finished goods inventory to equal 70% of the next month’s expected unit sales. 4. The June 30 raw materials inventory is 4,375 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw materials cost $8 per unit. Each finished unit requires 0.50 units of raw materials. Company policy calls for a given month’s ending raw materials inventory to equal 20% of the next month’s materials requirements. 5. Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour. 6. Overhead is allocated based on direct labor hours.
The predetermined variable overhead rate is $1.35 per direct labor hour. Depreciation of $20,000 per month is treated as fixed factory overhead. 7. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable. 8. Sales representatives’ commissions are 10% of sales and are paid in the month of the sales. The sales manager’s monthly salary is $3,750 per month. 9. The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale). 10. All raw materials purchases are on credit, and no payables arise from any other transactions. One month’s raw materials purchases are fully paid in the next month. 11. Dividends of $20,000 are to be declared and paid in August. 12. Income taxes payable at June 30 will be paid in July. Income tax expense will be assessed at 35% in the quarter and paid in October. 13. Equipment purchases of $100,000 are budgeted for the last day of September. he minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance. Get accounting assignment Assignment: I need help writing a research paper.
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