$7,500 73,500 26,850 107,850 KRAUSE INDUSTRIES Balance Sheet December 31, 2016 Assets Current Assets Cash Accounts receivable Finished goods inventory (1,500 units) Total current assets Property, Plant, and Equipment Equipment $40,690 Less: Accumulated depreciation 10,530 Total assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable Total liabilities Stockholders' Equity Common stock $37,860 Retained earnings 27,240 Total stockholders' equity Total liabilities and stockholders' equity 30,160 $138,010 $27,650 45,260 72,910 Budgeted data for the year 2017 include the following. 65,100 $138,010 2017 Quarter 4 Total $76,800 $256,000 13,990 62,500 12,500 50,900 10,000 50,480 16,380 75,000 Sales budget (8,000 units at $32) Direct materials used Direct labor Manufacturing overhead applied Selling and administrative expenses Budgeted data for the year 2017 include the following. To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2017, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $18. Krause uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes. In 2017, the company expects to declare and pay an $8,360 cash dividend. The company's cash budget shows an expected cash balance of $5,880 at December 31, 2017. All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2017 , the company expects to purchase additional equipment costing $10,500.56,213 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Krause expects to pay $8,470 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2017, includes amounts due suppliers (see above) plus other accounts payable of $8,320. Unpaid income taxes at December 31 will be $5,750. KRAUSE INDUSTRIES Budgeted Cost of Goods Sold For the Year Ending December 31, 2017 Finished Goods Inventory, 1/1/17 26850 Cost of Goods Manufactured Direct Materials Used 62500 Direct Labor 50900 Manufacturing Overhead Applied 50480 163880 CU Cost of Goods Available For Sale 190730 Finished Goods Inventory, 12/31/17 V 45000 Cost of Goods Sold 145730 Click if you would like to Show Work for this question: Open Show Work (b) Prepare a budgeted multiple-step income statement for 2017. KRAUSE INDUSTRIES Budgeted Income Statement $ $ Click if you would like to Show Work for this question: Open Show Work