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Could you please focust on the Accounts Recivable collections, Payments of accounts payable budget, Cost of good manufactured assignment and the income statment. Those are
Could you please focust on the Accounts Recivable collections, Payments of accounts payable budget, Cost of good manufactured assignment and the income statment. Those are what I am stuck on Thank you! Fair Trade manufactures industrial dye. The company is preparing is master budget and has presented you with the following information.
a The December balance sheet for the company follows:
Fair Trade
Balance Sheet
December
Assets Liabilities and Stockholders Equity
Cash $ Notes Payable $
Account Receivable Accounts Payable
Raw Material Inventory Dividends Payable
Finished Goods Inventory Total Liabilities $
Prepaid Insurance Common Stock $
Building $ Paidin Capital
Accum Depr. Retained Earnings
Total Assets $ Total Liabilities and Equity $
b The Accounts Receivable balance at represents the remaining balances of November and December credit sales. Sales were $ and $ respectively for those two months.
c Estimated sales in gallons of dye for January through May follow:
January
February
March
April
May
Each gallon of dye sells for $
d The collection pattern for accounts receivable is as follows: percent in the month of sale, percent in the first month after the sale, and percent in the second month after the sale. The company expects no bad debts and gives no cash discounts.
e Each gallon of dye has the following standard quantities and costs for direct material and direct labor:
gallons of direct material some evaporation occurs during processing X $ per gallon $
hours of direct labor X $ per hour $
f Variable overhead VOH is applied to the product on a machinehour basis. Processing gallon of dye takes hours of machine time. The variable overhead rate is $ per machine hour; VOH consists entirely of utility costs. Total annual fixed overhead is $; it is applied at $ per gallon based on an expected annual capacity of gallons. Fixed overhead per year is composed of the following costs:
Salaries $
Utilities
Insurancefactory
Depreciationfactory
Hint: Insurancefactory and Deprecationfactory are considered noncash items when preparing the FMOH budget.
g There is no beginning Work in Process Inventory. All work in process is completed in the period in which it is started. Raw Material Inventory at the beginning of the year consists of gallons of direct material at a standard cost of $ per gallon. There are gallons of dye in Finished Goods Inventory at the beginning of the year carried at a standard cost of $ per gallon; direct material, $; direct labor, $ variable overhead, $; and fixed overhead, $
h Accounts Payable relates solely to raw material and is paid percent in the month of purchase and percent in the month after purchase. No discounts are received for prompt payment.
i The dividend will be paid in January
J A new piece of equipment costing $ will be purchased on March Payment of percent will be made in March and percent in April. The equipment has a useful life of three years and will have no salvage value. Use this information to compute and record depreciation and accumulated depreciation for the first quarter on this new equipment to be reflected in the MOH budget, budgeted IS and budgeted BS
K The note payable has a percent annual interest rate, interest is paid at the end of each month. The principal of the note is repaid as cash is available to do so In January, $ of principal will be repaid on the loan and $ will be repaid in February. Hint: Monthly interest expense PXRXT Remember to convert your interest rate to a monthly rate when calculating the expense
l The companys management has a set minimum cash balance of $ Interest on any borrowings is expected to be percent per year.
m The ending Finished Goods Inventory should include percent of the next months needs. This is not true at the beginning of due to a miscalculation in sales for December. The ending inventory of raw materials should also be percent of the next months needs.
n Selling and administrative costs per month are as follows: salaries, $ rent, $ and utilities $ These costs are all fixed; there is no variable portion.
o The companys tax rate is percent. Because taxes are paid in the following calendar year, you will need to record income tax expense and income tax payable for the quarter ending March to be reflected in the budgeted IS and budgeted BS
Prepare a master budget for each month of the first quarter of and a budgeted income statement and balance sheet for the period January st March st
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