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	$	8,100
Supplies inventory	$	3,200
Equipment	$	34,000
Accumulated depreciation	$	16,000
Accounts payable	$	1,800
Common stock	$	5,000
Retained earnings		?

The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted to be $4,800.

Required:

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

Answer 1

Mecca Copy
Budgeted Balance Sheet
Assets
Current Assests
Cash	12,200
Accounts Receivable	8,100
Supplies Inventory	3,200
Total current assets		23,500
Plant and equipment
Equipment	34,000
Less: Accumulated Depreciation	(16,000)
Plant and equipment, net		18,000
Total Assets		41,500
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable		1,800
Stockholders' Equity
Common Stock	5,000
Retained Earnings	34,700
Total Stockholders' Equity		39,700
Total Liabilities and Stockholders' Equity		41,500
Working
Retained Earnings
($28,000 + $11,500 - $4,800)