Budgeted Income Statement and Balance Sheet

As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Webster Publishing Co.:

Factory output and sales for 2017 are expected to total 28,000 units of product, which are to be sold at $90 per unit. The quantities and costs of the inventories at December 31, 2017, are expected to remain unchanged from the balances at the beginning of the year.

Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:

Balances of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of $199,900 on 2017 taxable income will be paid during 2017. Regular quarterly cash dividends of $1 per share are expected to be declared and paid in March, June, September, and December on 35,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for $150,000 cash in May.

Required:

• Prepare a budgeted income statement for 2017.
• Prepare a budgeted balance sheet as of December 31, 2017.

Selected financial statement information and additional data for Carla Vista Co. is presented below.

Prepare a statement of cash flows for the year ending December 31, 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

On January 1 of this year, Shannon Company completed the following transactions (assume a 8% annual interest rate): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

1. Bought a delivery truck and agreed to pay $61,400 at the end of three years.
2. Rented an office building and was given the option of paying $11,400 at the end of each of the next three years or paying $30,000 immediately.
3. Established a savings account by depositing a single amount that will increase to $92,800 at the end of seven years.
4. Decided to deposit a single sum in the bank that will provide 8 equal annual year-end payments of $41,400 to a retired employee (payments starting December 31 of this year).

An investment will pay $20,500 at the end of the first year, $30,500 at the end of the second year, and $50,500 at the end of the third year. (FV of $1, PV of $1, FVA of $1, and PVA of $1)(Use the appropriate factor(s) from the tables provided.)

Determine the present value of this investment using a 8% annual interest rate. (Round your answer to nearest whole dollar.)

QUESTION: What are the IDENTIFY CHARACTERISTICS that define successful budgeting processes and best practices?

Instructions:

(1). MUST Use Strategic Planning & Budgeting strong vocabularies

(2). MUST Include Citations and References. Original work - No plagiarism allow

Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.)

1. $800 per year for 10 years at 8%.
   $  
   
2. $400 per year for 5 years at 4%.
   $  
   
3. $800 per year for 5 years at 0%.
   $  

Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.

4. $800 per year for 10 years at 8%.
   $  
   
5. $400 per year for 5 years at 4%.
   $  
   
6. $800 per year for 5 years at 0%.
   $  

Diane Corporation is preparing its year-end balance sheet. The company records show the following selected amounts at the end of the year:

The CDG Carlos, Dan, and Gail Partnership has decided to liquidate as of December 1, 20X6. A balance sheet on the date follows: CDG PARTNERSHIP Balance Sheet At December 1, 20X6 Assets Cash $ 32,500 Accounts Receivable (net) 90,000 Inventories 115,000 Property, Plant and Equipment (net) 330,000 Total Assets $ 567,500 Liabilities and Capital Liabilities: Accounts Payable $ 292,500 Capital: Carlos, Capital $ 135,000 Dan, Capital 65,000 Gail, Capital 75,000 Total Capital 275,000 Total Liabilities and Capital $ 567,500 Additional Information Each partner’s personal assets (excluding partnership capital interests) and personal liabilities as of December 1, 20X6, follow: Carlos Dan Gail Personal assets $ 265,000 $ 315,000 $ 365,000 Personal liabilities (237,500 ) ( 232,500 ) (343,900 ) Personal net worth $ 27,500 $ 82,500 $ 21,100 Carlos, Dan, and Gail share profits and losses in the ratio 20:40:40. CDG sold all noncash assets on December 10, 20X6, for $273,500.

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:

From past experience, the company has learned that 30% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $370,000, and March sales totaled $400,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits.

profits.

1. Refer to the data in case A above. Assume in this case that $1 per unit in variable selling costs can be avoided on intracompany sales.

a. What is the lowest acceptable transfer price from the perspective of the selling division?

b. What is the highest acceptable transfer price from the perspective of the buying division?

c. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make decisions on their own, will a transfer probably take place?

2. Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompany sales.

a. What is the lowest acceptable transfer price from the perspective of the selling division?

b. What is the highest acceptable transfer price from the perspective of the buying division?

c. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make decisions on their own, will a transfer probably take place?

Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700. The printer is expected to have a four-year useful life and a $3,700 salvage value. The expected print production is estimated at $1,770,500 pages. Actual print production for the four years was as follows:

The printer was sold at the end of Year 4 for $4,100.

b. Compute the depreciation expense for each of the four years, using units-of-production depreciation.

Depreciation Expense

Year 1

Year 2

Year 3

Year 4

Total accumulated depreciation$0

Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700. The printer is expected to have a four-year useful life and a $3,700 salvage value. The expected print production is estimated at $1,770,500 pages. Actual print production for the four years was as follows:

The printer was sold at the end of Year 4 for $4,100.

c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.

DDB =

Units-of-production=

Requirements

Identify a macro theme of accounting that you would like to investigate.

Explain why you selected the topic. .

Perform a brainstorming exercise to delimit the topic.

Brainstorming should include at least 10 concepts or ideas.

Specifies what the central theme is and what the secondary themes are

SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization-sustaining activity. The following costs will be assigned using the activity-based costing system:

The distribution of resource consumption across the activity cost pools is as follows:

Required:

Complete the first stage allocations of costs to activity cost pools.

Static Budget versus Flexible Budget The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year: Hagerstown Company Machining Department Monthly Production Budget Wages $426,000 Utilities 35,000 Depreciation 58,000 Total $519,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced May $490,000 122,000 June 469,000 111,000 July 448,000 100,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for May–July have been significantly less than the monthly static budget of 519,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $16.00 Utility cost per direct labor hour $1.30 Direct labor hours per unit 0.20 Planned monthly unit production 133,000 a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Hagerstown Company Machining Department Budget For the Three Months Ending July 31 May June July Units of production 122,000 111,000 100,000 Wages $ $ $ Utilities Depreciation Total $ $ $ Supporting calculations: Units of production 122,000 111,000 100,000 Hours per unit x x x Total hours of production Wages per hour x $ x $ x $ Total wages $ $ $ Total hours of production Utility costs per hour x $ x $ x $ Total utilities $ $ $ Feedback For each level of production, show wages, utilities, and depreciation. b. Compare the flexible budget with the actual expenditures for the first three months. May June July Total flexible budget $ $ $ Actual cost Excess of actual cost over budget $ $ $ What does this comparison suggest? The Machining Department has performed better than originally thought. No The department is spending more than would be expected. Yes

Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700. The printer is expected to have a four-year useful life and a $3,700 salvage value. The expected print production is estimated at $1,770,500 pages. Actual print production for the four years was as follows:

The printer was sold at the end of Year 4 for $4,100.

Required
a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.

epreciation Expense

Year 1

Year 2

Year 3

Year 4

Total accumulated depreciation$0