02 Jul Budgeted Balance Sheet – Jan – Mar 2017
LANNING DATA FOR 2017 All Sales are on Credit Collections of Accounts Receivable: Month of Service48.00%Month following Service52.00% Actual December 2016 Sales$200,000Expected Sales in Dollars January$240,000February$195,000March$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 month25.00%Purchases paid in next month75.00%Actual Purchases made in December 2016$141,360 Sales commission as a percent of sales2.50%Sales commission are paid one month after the month incurred. Advertising expenses have a fixed and variable portion: Fixed portion$4,400The fixed portion of the advertising is paid in the current month. Variable portion as a percentage of sales1.00%The variable portion is paid one month after the month incurred. Insurance policy: Months of insurance coverage paid for12The policy period is from March 1 to February 28 each year The premium to be paid on March 1, 2017 is$2,100The 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$26,000Variable portion as a percentage of sales3.00%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 is4.50%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 rate30%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$11,000It will be paid on March 15. BALANCE SHEET December 31, 2016 ASSETS Current Assets Cash$108,200 Accounts Receivable1,04,000 Inventory1,04,160 Prepaid Insurance350 Total Current Assets3,16,710 Property Plant and Equipment Office Equipment2,76,000 Accumulated Depreciation-55,200 Total Property Plant and Equipment2,20,800 Total Assets$537,510 LIABILITIES AND SHAREHOLDERS EQUITY LIABILITIES Current Liabilities Accounts Payable – Purchases$106,020 Sales Commission Payable5,000 Selling and Admin Payable6,000 Advertising Payable2,000 Interest Payable1,313 Dividends Payable- Income Taxes Payable15,530 Total Current Liabilities1,35,863 Long Term Debt1,75,000 Total Liabilities3,10,863 SHAREHOLDERS’ EQUITY Common Stock1,40,000 Retained Earnings86,647 Total Shareholders’ Equity2,26,647 Total Liabilities and Shareholders Equity$537,510 Prepare Budgeted Balance Sheet for the Quarter Jan – March 2017
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