Asked by Charlotte Laprarie on Jul 02, 2024
Verified
Use the following information to prepare a budgeted balance sheet for Grover Company for the month of June.
a.The budgeted net income for the month of June is $236,000.
b.The beginning cash balance is $62,000; total budgeted cash receipts are $1,660,000; total budgeted cash payments are $1,580,000.
c.Budgeted sales for June are $1,700,000.Collections are 40% in the month of sale and 60% in the month following.
d.The projected inventory balance is 10% of the following month's sales.Sales for July are projected to be $1,750,000.
e.Budgeted purchases for June are $900,000 to be paid 80% in the month of purchase and 20% in the month following.
f.The equipment account balance is $1,400,000 on May 31.No equipment purchases or disposals will be made during June.On May 31,the accumulated depreciation is $276,000.Depreciation expense for June is estimated to be $24,000.
g.An outstanding loan balance of $800,000 is expected at the end of June.
h.Accrued income taxes payable for June 30 are expected to be $71,000.Salaries payable for June 30 are expected to be $50,000.
i.The only other balance sheet accounts are: Common Stock,with a balance of $800,000 on May 31,and Retained Earnings with a balance of $300,000 on May 31.No additional common stock will be issued and no dividends will be paid during June.
Budgeted Balance Sheet
A financial statement that projects assets, liabilities, and equity balances at the end of a future period based on planned business activities.
Accumulated Depreciation
The total depreciation of a company’s assets over their useful lives, representing a decrease in value over time.
Projected Inventory Balance
The estimated quantity of goods a company expects to have on hand over a future period considering expected sales and production.
- Gain proficiency in preparing a budgeted balance sheet, considering projected cash flows, sales, inventory, and debt levels.
Verified Answer
Accounts receivable balance = $1,700,000 ∗ 60% = $1,020,000
Merchandise inventory balance = $1,750,000 ∗ 10% = $175,000
Accumulated depreciation = $276,000 + $24,000 = $300,000
Accounts payable balance = $900,000 ∗ 20% = $180,000
Learning Objectives
- Gain proficiency in preparing a budgeted balance sheet, considering projected cash flows, sales, inventory, and debt levels.
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