Budgeted Balance Sheet Williams Company First Quarter End of Januar End of Febraur End of March Quarter 1 The Williams Company manufactures PVC piping in long pipes which a finish manufacturer purchases and cuts to length for sale to retailers. Williams Company manufactures their piping using resin, sheets of raw PVC, and direct labor. The Williams Company has the following balance sheet as of December 314 Balance Sheet on December 314 Assets Cash $41700 Accounts Receivable 192000 Raw Materials 102240 Finished Goods 64400 Land 50000 Plant and Equipment 500000 Less: Accumulated Depreciation 112000 388000 Total Assets 5838340 Liabilities and Stockholders' Equity Accounts Payable to Suppliers $40000 Common Stock 100000 Retained Earnings 698340 798340 Total Liabilities and Equity $838340 Assets Cash Accounts receivable Finished goods inventory Raw materials inventory RAW PVC RESIN Land Building and equipment Less Accumulated depreciation Total assets Liabilities & Stockholders' Equity Accounts payable Common Stock Retained earnings The information shown below is extracted from the records of the Williams Company Total liabilities & Stockholders' Equity $0 $0 so 1. The Williams Company has projected its unit sales for the next five months to be: Month Units Budgeted Income Sau Williams Company First Quarter January February March April May 7000 8000 10000 8000 7000 January February March Quarter 1 All sales are made on accounts recewable Each unit of PVC sells for $60. Forty percent of all sales are collected in the month of the sale. The remaining 60% of the sales are collected in the following month. May consider bad debts as non-existent 2 Williams Company has a management rule that at the end of each month the ending finished goods inventory of PVC must be 20% of the following month's forecasted sales. Williams Company's finished goods inventory on December 31" consists of 1400 units of PVC piping Sales Cost of goods sold (units sold unit cost) Gross profit Selling and administration expenses Income from operations Interest expense Income before income taxes Income tax expense Net income SO SO SO SO 3. In order to produce one unit of PVC pipe, the following units of raw PVC and resin are used Raw Material Taits Raw PVC Resin Notes: 1. 1400 finished PVC in Inventory 12/31 balance sheet value of $64,400. Unit cost for these units $64,400/1400-546 2. COGS in January calculated 1400-545 plus 17000-1400)5464 The price of raw PVC sheets is now $4.00 per unit. The price of resin is $2.80 per unit Management desires to maintain ending raw materials inventories for raw PVC and resin at 25% of the next month's production needs. William Company's December 31" raw material holdings were 18,000 units of raw PVC (at 54.00 per unit) and 10,800 units of resin (at 52.80 per unit) 4. Seventy percent of all purchases (raw PVC and resin) are paid in the month of purchase The remaining 30% is placed on an account payable and pand the following month 5. The production of PVC by Williams Company requires 30 minutes of direct labor time to complete. All laber costs are paid in the month incurred. Each hour of direct labor costs Williams Company $24 6. Factory overhead is applied at the rate of S12 per direct labor hour. Actual overhead costs are pand as they are incurred. Monthly differences between applied and actual overhead costs are expected to be negligible 7 Selling and Administrative expenses are $10,000 per month plus 10% of sales. All these expenses are paid in the month in which they are incurred. 8 Plant and equipment depreciate at the rate of S12,000 per year. This depreciation is incurred evenly throughout the year and es included in the factory overhead costs mensoned earlier Budgeted Balance Sheet Williams Company First Quarter End of Januar End of Febraur End of March Quarter 1 The Williams Company manufactures PVC piping in long pipes which a finish manufacturer purchases and cuts to length for sale to retailers. Williams Company manufactures their piping using resin, sheets of raw PVC, and direct labor. The Williams Company has the following balance sheet as of December 314 Balance Sheet on December 314 Assets Cash $41700 Accounts Receivable 192000 Raw Materials 102240 Finished Goods 64400 Land 50000 Plant and Equipment 500000 Less: Accumulated Depreciation 112000 388000 Total Assets 5838340 Liabilities and Stockholders' Equity Accounts Payable to Suppliers $40000 Common Stock 100000 Retained Earnings 698340 798340 Total Liabilities and Equity $838340 Assets Cash Accounts receivable Finished goods inventory Raw materials inventory RAW PVC RESIN Land Building and equipment Less Accumulated depreciation Total assets Liabilities & Stockholders' Equity Accounts payable Common Stock Retained earnings The information shown below is extracted from the records of the Williams Company Total liabilities & Stockholders' Equity $0 $0 so 1. The Williams Company has projected its unit sales for the next five months to be: Month Units Budgeted Income Sau Williams Company First Quarter January February March April May 7000 8000 10000 8000 7000 January February March Quarter 1 All sales are made on accounts recewable Each unit of PVC sells for $60. Forty percent of all sales are collected in the month of the sale. The remaining 60% of the sales are collected in the following month. May consider bad debts as non-existent 2 Williams Company has a management rule that at the end of each month the ending finished goods inventory of PVC must be 20% of the following month's forecasted sales. Williams Company's finished goods inventory on December 31" consists of 1400 units of PVC piping Sales Cost of goods sold (units sold unit cost) Gross profit Selling and administration expenses Income from operations Interest expense Income before income taxes Income tax expense Net income SO SO SO SO 3. In order to produce one unit of PVC pipe, the following units of raw PVC and resin are used Raw Material Taits Raw PVC Resin Notes: 1. 1400 finished PVC in Inventory 12/31 balance sheet value of $64,400. Unit cost for these units $64,400/1400-546 2. COGS in January calculated 1400-545 plus 17000-1400)5464 The price of raw PVC sheets is now $4.00 per unit. The price of resin is $2.80 per unit Management desires to maintain ending raw materials inventories for raw PVC and resin at 25% of the next month's production needs. William Company's December 31" raw material holdings were 18,000 units of raw PVC (at 54.00 per unit) and 10,800 units of resin (at 52.80 per unit) 4. Seventy percent of all purchases (raw PVC and resin) are paid in the month of purchase The remaining 30% is placed on an account payable and pand the following month 5. The production of PVC by Williams Company requires 30 minutes of direct labor time to complete. All laber costs are paid in the month incurred. Each hour of direct labor costs Williams Company $24 6. Factory overhead is applied at the rate of S12 per direct labor hour. Actual overhead costs are pand as they are incurred. Monthly differences between applied and actual overhead costs are expected to be negligible 7 Selling and Administrative expenses are $10,000 per month plus 10% of sales. All these expenses are paid in the month in which they are incurred. 8 Plant and equipment depreciate at the rate of S12,000 per year. This depreciation is incurred evenly throughout the year and es included in the factory overhead costs mensoned earlier