Forecast Sales Volume and Sales Budget
Raphael Frame Company prepared the following sales budget for 2016:
| Raphael Frame Company Sales Budget For the Year Ending December 31, 2016 |
|||||||
| Product and Area | Unit Sales Volume |
Unit Selling Price |
Total Sales | ||||
| 8" × 10" Frame: | |||||||
| East | 8,500 | $16 | $136,000 | ||||
| Central | 6,200 | 16 | 99,200 | ||||
| West | 12,600 | 16 | 201,600 | ||||
| Total | 27,300 | $436,800 | |||||
| 12" × 16" Frame: | |||||||
| East | 3,800 | $30 | $114,000 | ||||
| Central | 3,000 | 30 | 90,000 | ||||
| West | 5,400 | 30 | 162,000 | ||||
| Total | 12,200 | $366,000 | |||||
| Total revenue from sales | $802,800 | ||||||
At the end of December 2016, the following unit sales data were reported for the year:
| Unit Sales | ||||
| 8" × 10" Frame | 12" × 16" Frame | |||
| East | 8,755 | 3,686 | ||
| Central | 6,510 | 3,090 | ||
| West | 12,348 | 5,616 | ||
For the year ending December 31, 2017, unit sales are expected to follow the patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $17 and the unit selling price for the 12" × 16" frame is expected to increase to $32, effective January 1, 2017.
Required:
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, over budget.
Enter any decreases beginning with a minus (-) sign.
| Unit Sales, Year Ended 2016 |
Increase (Decrease) Actual Over Budget |
||||||
| Budget | Actual Sales | Difference | Percent | ||||
| 8" × 10" Frame: | |||||||
| East | % | ||||||
| Central | % | ||||||
| West | % | ||||||
| 12" × 16" Frame: | |||||||
| East | % | ||||||
| Central | % | ||||||
| West | % | ||||||
2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 2017, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 2017.
Enter any decreases beginning with a minus (-) sign. Round budgeted units to the nearest whole unit.
| 2016 Actual Units |
Percentage Increase (Decrease) |
2017 Budgeted Units (rounded) |
|||
| 8" × 10" Frame: | |||||
| East | % | ||||
| Central | % | ||||
| West | % | ||||
| 12" × 16" Frame: | |||||
| East | % | ||||
| Central | % | ||||
| West | % | ||||
. Prepare a sales budget for the year ending December 31, 2017.
| Raphael Frame Company | |||
| Sales Budget | |||
| For the Year Ending December 31, 2017 | |||
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
| 8" × 10" Frame: | |||
| East | $ | $ | |
| Central | |||
| West | |||
| Total | $ | ||
| 12" × 16" Frame: | |||
| East | $ | $ | |
| Central | |||
| West | |||
| Total | $ | ||
| Total revenue from sales | $ | ||
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The accountant for Becker Company wants to develop a balance sheet as of December 31, 2016. A review of the asset records has revealed the following information:
| a. | Asset A was purchased on July 1, 2014, for $40,000 and has been depreciated on the straight-line basis using an estimated life of six years and a residual value of $4,000. |
| b. | Asset B was purchased on January 1, 2015, for $79,200. The straight-line method has been used for depreciation purposes. Originally, the estimated life of the asset was projected to be six years with a residual value of $7,200; however, at the beginning of 2016, the accountant learned that the remaining life of the asset was only three years with a residual value of $2,400. |
| c. | Asset C was purchased on January 1, 2015, for $58,000. The double-declining-balance method has been used for depreciation purposes, with a four-year life and a residual value estimate of $5,000. |
Required:
| 1. | Assume that these assets represent pieces of equipment. Calculate the acquisition cost, accumulated depreciation, and book value of each asset as of December 31, 2016. |
| 2. | How would the assets appear on the balance sheet on December 31, 2016? |
| 3. | Assume that Becker Company sold Asset B on January 2, 2017, for $32,600. Calculate the amount of the resulting gain or loss and prepare the journal entry for the sale. Where would the gain or loss appear on the income statement? |
The accountant for Becker Company wants to develop a balance sheet as of December 31, 2016. A review of the asset records has revealed the following information:
| a. | Asset A was purchased on July 1, 2014, for $40,000 and has been depreciated on the straight-line basis using an estimated life of six years and a residual value of $4,000. |
| b. | Asset B was purchased on January 1, 2015, for $79,200. The straight-line method has been used for depreciation purposes. Originally, the estimated life of the asset was projected to be six years with a residual value of $7,200; however, at the beginning of 2016, the accountant learned that the remaining life of the asset was only three years with a residual value of $2,400. |
| c. | Asset C was purchased on January 1, 2015, for $58,000. The double-declining-balance method has been used for depreciation purposes, with a four-year life and a residual value estimate of $5,000. |
Required:
| 1. | Assume that these assets represent pieces of equipment. Calculate the acquisition cost, accumulated depreciation, and book value of each asset as of December 31, 2016. |
| 2. | How would the assets appear on the balance sheet on December 31, 2016? |
| 3. | Assume that Becker Company sold Asset B on January 2, 2017, for $32,600. Calculate the amount of the resulting gain or loss and prepare the journal entry for the sale. Where would the gain or loss appear on the income statement? |
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