Question

The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:

	Ending Balances
Cash		?
Accounts receivable	$	8,500
Supplies inventory	$	4,700
Equipment	$	36,000
Accumulated depreciation	$	14,600
Accounts payable	$	2,200
Common stock	$	5,000
Retained earnings		?

The beginning balance of retained earnings was $32,000, net income is budgeted to be $16,300, and dividends are budgeted to be $2,700.

Required:

Prepare the company’s budgeted balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

	Mecca Copy Budgeted Balance Sheet Assets Current assets: Total current assets Plant and equipment: Plant and equipment, net Total assets Liabilities and Stockholders' Equity Current liabilities: Stockholders' equity: Total stockholders' equity Total liabilities and stockholders' equity

Answer 1

Beginning retained earnings	$ 32,000
Add: Budgeted net income	$ 16,300
Less: Budgeted dividends	$ (2,700)
Ending retained earnings	$ 45,600

Mecca Copy
Budgeted balance sheet
Assets
Current assets
Cash ($52,800-$8,500-$4,700-$21,400)	$   18,200
Accounts receivable	$      8,500
Supplies inventory	$      4,700
Total current assets		$ 31,400
Plant and equipment
Equipment	$   36,000
Accumulated depreciation	$ (14,600)
Plant and equipment, net		$ 21,400
Total assets		$ 52,800
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$    2,200
Stockholders' equity:
Common stock	$      5,000
Retained earnings	$   45,600
Total stockholders' equity		$ 50,600
Total liabilities and stockholders' equity		$ 52,800

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