Question
ABC INC, announces the following accounts and balances on 12/31/17: Cash $25,000 Equipment (net) 10,000 Inventory 75,000 Retained Earnings 20,000 Common Stock 90,000 During the
ABC INC, announces the following accounts and balances on 12/31/17:
Cash $25,000
Equipment (net) 10,000
Inventory 75,000
Retained Earnings 20,000
Common Stock 90,000
During the first quarter [January _ March] of 2018 the business gauges they will sell 150 units of an item at a cost of $200 per unit. All units are sold on account. The business estimates the account receivable balance will be 15% of the sales revenue for the quarter. The business plans to buy 120 units of an item at a cost of $125 per unit during the quarter. They estimate the account payable balance will be 25% of the budgeted quarterly purchases at the end of the quarter. The business estimates selling & general/administrative expenses of $9,000 for the quarter ($500 of this amount is for depreciation expense).
Prepare a budgeted income statement for the first quarter of 2018 and a budgeted balance sheet as of 3/31/18.
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