The projected October 31, 2014, balance sheet for Blanco Co. follows:
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ASSETS
|
|
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Cash
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$28,000,000
|
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Accounts Receivable (net of Allowance of uncollectible of $3,000,000)
|
57,000,000
|
|
Inventory
|
52,500,000
|
|
Property, Plant, and Equipment (net of Accumulated Depreciation of $37,500,000)
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112,500,000
|
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Total Assets
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$250,000,000
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|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY
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|
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Accounts Payable
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$165,000,000
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Common Stock
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120,000,000
|
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Retained Earnings (Deficit)
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(35,000,000)
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Total Assets
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$250,000,000
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Additional information is as follows:
Sales for November and December are budgeted at $330,000,000 and $360,000,000, respectively.
Collections are expected to be 70 percent in the month of sale, 28 percent in the following month, and 2 percent uncollectible.
The company's gross profit is projected at 30 percent of sales.
Purchases each month are 70 percent of the following month's projected sales. Purchases are paid in full in the month following the purchase.
Other monthly cash expenses are $46,500,000. Monthly depreciation is $15,000,000.
b. Prepare a budgeted balance sheet for November 2014:
Cash
Accounts Receivable
Inventory
Property, Plant and Equipment
Accounts Payable
Common Stock
Retained Earnings