Near the end of 2015, the management of Babalu Musical Instrument Co., a new mer

Question

Near the end of 2015, the management of Babalu Musical Instrument Co., a new merchandising company, prepared the following estimated balance sheet for December 31, 2015.

BABALU MUSICAL INSTRUMENT COMPANY Estimated Balance Sheet December 31,2015 Assets Cash Accounts receivable Liabilities and Equity Accounts payable Bank loan payable Taxes payable (due 3/15/2016) S375,000 15,000 91,000 S36,500 520,000 95,000 Inventory Total current assets Equipment Less accumulated depreciation 651,500 Total liabilities $481,000 S537,000 67,125 470,000 170,375 Common stock 469,875 Retained earnings Total stockholders' equity Total liabilities and equity 640,375 S1,121,375 Total assets $1,121,375

Explanation / Answer

Answer:7) Budgted Income Statement

Budgeted Income Statement Sales 1512000.00 Less:Cost of goods sold 540000.00 Gross margin 972000.00 Less: Sale commissions 302400.00 Sales Salaries 21000.00 General and administrative exp 39000.00 Maintenance exp 6300.00 Depreciation 20192.71 Less: interest expense 450.00 Earning before tax 582657.29 Less: tax 186450.33 Net income 396206.96

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