Exercise 20-33A Merchandising: Budgeted balance sheet LO P3 The following inform
ID: 2550146 • Letter: E
Question
Exercise 20-33A Merchandising: Budgeted balance sheet LO P3
The following information is available for Zetrov Company:
The cash budget for March shows an ending bank loan of $15,000 and an ending cash balance of $61,000.
The sales budget for March indicates sales of $130,000. Accounts receivable are expected to be 65% of the current-month sales.
The merchandise purchases budget indicates that $90,000 in merchandise will be purchased on account in March. Purchases on account are paid 100% in the month following the purchase. Ending inventory for March is predicted to be 700 units at a cost of $35 each.
The budgeted income statement for March shows net income of $49,000. Depreciation expense of $2,000 and $27,000 in income tax expense were used in computing net income for March. Accrued taxes will be paid in April.
The balance sheet for February shows equipment of $83,000 with accumulated depreciation of $31,000, common stock of $30,000, and ending retained earnings of $9,000. There are no changes budgeted in the equipment or common stock accounts.
Prepare a budgeted balance sheet at the end of March.
Explanation / Answer
Answer:
Assets
Cash balance
61000
accounts receivable (130,000*65%)
84500
Merchandise inventory (700*35)
24500
Total Current Assets
170000
Equipment
83000
Accumulated dep (31000+2000)
33000
Equipment Net
50000
Total Assets
220000
Liability
accounts Payable
90,000
Income tax Payable
27000
bank Loan Payable
15,000
132,000
Equity
Common stock
30000
Retained earnings (9000+49000)
58000
Total Stock holder's Equity
88000
Total Liability
220,000
Assets
Cash balance
61000
accounts receivable (130,000*65%)
84500
Merchandise inventory (700*35)
24500
Total Current Assets
170000
Equipment
83000
Accumulated dep (31000+2000)
33000
Equipment Net
50000
Total Assets
220000
Liability
accounts Payable
90,000
Income tax Payable
27000
bank Loan Payable
15,000
132,000
Equity
Common stock
30000
Retained earnings (9000+49000)
58000
Total Stock holder's Equity
88000
Total Liability
220,000
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