Bill Thomas, Bates & Hill's controller, has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The company's balance sheet of December 31 is as follows:
Cash
|
$ 37,200
|
Accounts Receivable (net)
|
36,270
|
Finished Goods Inventory
|
30,380 |
Raw Materials Inventory
|
4,687
|
Property, Plant & Equipment
|
186,000
|
Accumulated Depreciation
|
(46,500 |
) |
| Total Assets |
$248,037
|
Accounts Payable
|
$ 11,160
|
Income Tax Payable
|
46,661
|
Common Stock
|
62,000
|
Retained Earnings
|
128,216
|
Total Liabilities & Owners Equity
|
$248,037
|
| Quarter |
Budgeted revenue
|
$874,200 |
| Selling and administrative expense |
165,168 |
| Interest expense |
2,096 |
| Cash |
19,081 |
| Cost of Goods Sold |
622,089 |
| Accounts receivable |
84,630 |
| Direct materials |
3,447 |
| Finished goods |
36,589 |
| Acounts payable |
20,584 |
| Notes payable |
25,420 |
Additional Information:
? Bates & Hill plans to declare and pay dividends totaling $30,380 in January.
? Bates & Hill plans to purchase and pay cash for a piece of land in February at a cost of $44,640.
? Bates & Hill plans to purchase equipment in March at a cost of $37,200.
? Depreciation for manufacturing overhead $18,600 per month and for selling and administrative $6,200 per month.
The company expects a 19% income tax rate, and all quarterly taxes are paid in the first month of the following quarter.