30 May Budgeted Balance Sheet
| Information : | ||
| PLANNING DATA FOR 2017 | ||
| All Sales are on Credit | ||
| Collections of Accounts Receivable: | ||
| Month of Service | 48.00% | |
| Month following Service | 52.00% | |
| Actual December 2016 Sales | $200,000 | |
| Expected Sales in Dollars | ||
| January | $240,000 | |
| February | $195,000 | |
| March | $175,000 | |
| April | $210,000 | |
| Cost of Goods Sold as a percentage of selling price. | 62.00% | |
| Planned ending inventory as a percentage of next month’s required inventory. | 70.00% | |
| Purchases are are all on credit. | ||
| Purchases paid in current month | 25.00% | |
| Purchases paid in next month | 75.00% | |
| Actual Purchases made in December 2016 | $141,360 | |
| Sales commission as a percent of sales | 2.50% | |
| Sales commission are paid one month after the month incurred. | ||
| Advertising expenses have a fixed and variable portion: | ||
| Fixed portion | $4,400 | |
| The fixed portion of the advertising is paid in the current month. | ||
| Variable portion as a percentage of sales | 1.00% | |
| The variable portion is paid one month after the month incurred. | ||
| Insurance policy: | ||
| Months of insurance coverage paid for | 12 | |
| The policy period is from March 1 to February 28 each year | ||
| The premium to be paid on March 1, 2017 is | $2,100 | |
| The premium will be charged to prepaid insurance | ||
| Selling and Administrative expenses have a fixed and variable portion: | ||
| Fixed portion is paid in the month incurred | $26,000 | |
| Variable portion as a percentage of sales | 3.00% | |
| S&A expenses are paid one month after the month incurred | ||
| Depreciation expense per month | $4,600 | |
| The annual interest rate on the long term debt is | 4.50% | |
| Interest is incurred on the principal balance outstanding each month. | ||
| Interest is paid on a quarterly basis. Interest for November to January will be paid February 1. | ||
| No principal payments are scheduled to be made on the long-term debt until August of 2017 | ||
| Income Tax rate | 30% | |
| Accrued taxes are paid on the 15th of January, April, July and October | ||
| The Company’s Board of Directors plans to declare a dividend on February 20 | $11,000 | |
| It will be paid on March 15. | ||
| BALANCE SHEET | ||
| December 31, 2016 | ||
| ASSETS | ||
| Current Assets | ||
| Cash | $108,200 | |
| Accounts Receivable | 1,04,000 | |
| Inventory | 1,04,160 | |
| Prepaid Insurance | 350 | |
| Total Current Assets | 3,16,710 | |
| Property Plant and Equipment | ||
| Office Equipment | 2,76,000 | |
| Accumulated Depreciation | -55,200 | |
| Total Property Plant and Equipment | 2,20,800 | |
| Total Assets | $537,510 | |
| LIABILITIES AND SHAREHOLDERS EQUITY | ||
| LIABILITIES | ||
| Current Liabilities | ||
| Accounts Payable – Purchases | $106,020 | |
| Sales Commission Payable | 5,000 | |
| Selling and Admin Payable | 6,000 | |
| Advertising Payable | 2,000 | |
| Interest Payable | 1,313 | |
| Dividends Payable | – | |
| Income Taxes Payable | 15,530 | |
| Total Current Liabilities | 1,35,863 | |
| Long Term Debt | 1,75,000 | |
| Total Liabilities | 3,10,863 | |
| SHAREHOLDERS’ EQUITY | ||
| Common Stock | 1,40,000 | |
| Retained Earnings | 86,647 | |
| Total Shareholders’ Equity | 2,26,647 | |
| Total Liabilities and Shareholders Equity | $537,510 | |
| Prepare Budgeted Balance Sheet for the Quarter Jan – March 2017 | ||
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