Gessing Tire Company Budgeted Balance Sheet December 31, 2019 Assets Current Assets: Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation Total Assets Liabilities Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 0 Reference Gessing Tire Company Production Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter Fourth Quarter Total Budgeted tires to be sold Plus: Desired tires in ending inventory Total tires needed 1,600 340 1,700 360 1,800 380 1,900 400 7,000 400 2,300 1,940 100 2,060 340 2,180 360 7,400 100 Less: Tires in beginning inventory 1,840 820 1.920 7,300 Budgeted tires to be produced Gessing Tire Company Direct Materials Budget For the Year Ended December 31, 2019 First Second Quarter Quarter Third Quarter Fourth Quarter Total Budgeted tires to be produced 1,840 1,720 1,820 1,920 7,300 3,640 3,840 Direct materials per tire Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed 3,680 1,032 3,440 1,092 1.152 14,600 200 200 4,712 14,800 4,532 1,032 4,792 1,092 4,040 1,152 200 Less: Direct materials in beginning inventory Budgeted purchases of direct materials 3,700 14,600 4.00 Direct materials cost per pound 3,500 4.00 $ 14,000 $ 4.00 $ 4.00 14,800 18,048 $ Budgeted cost of direct materials 58,400 Total Gessing Tire Company Selling and Administrative Expense Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Salaries Expense 11,000S 11,000S 11,000 $ 11,000 Rent Expense 5,100 5,100 5,100 5,100 Insurance Expense 900 Depreciation Expense 2,000 2,000 2,000 2,000 Supplies Expense 3,360 3,570 3,780 3,990 S 22,360 S Total budgeted selling and administrative expense 22,570 $ 22,780 $ 22.990s 900 900 900 44,000 20,400 3,600 8,000 14,700 90 700 Cash Receipts from Customers Total Total sales First Second Third Fourth Quarter Quarter Quarter Quarter $ 112,000||$ 119,000||$ 126,000$ 133,000 S First Second Third Fourth Quarter Quarter Quarter Quarter 490,000 Total 25,000 33,600 54,880 $ Cash Receipts from Customers: Accounts Receivable balance, December 31, 2018 1st Qtr.Cash sales 1st Qtr.-Credit sales, collection of Qtr. 1 sales in Qtr. 1 1st Qtr.Credit sales, collection of Qtr. 1 sales in Qtr. 2 2nd Qtr.Cash sales 2nd Qtr.-Credit sales, collection of Qtr. 2 sales in Qtr. 2 2nd Qtr.-Credit sales, collection of Qtr. 2 sales in Qtr. 3 3rd Qtr.Cash sales 3rd Qtr.-Credit sales, collection of Qtr. 3 sales in Qtr. 3 3rd Qtr.Credit sales, collection of Qtr. 3 sales in Qtr. 4 4th Qtr.Cash sales 4th Qtr.-Credit sales, collection of Qtr. 4 sales in Qtr. 4 23,520 35,700 58,310 $ 24,990 37,800 61,740 $ 26,460 39,900 65,170 131,530 $ $ Total cash receipts from customers 113,480 $ 117,530 $ 124,530 $ 487,070 Accounts Receivable balance, December 31, 2019: 4th Qtr.Credit sales, collection of Qtr. 4 sales in Qtr. 1 of 2020 $ 27,930 Cash Payments Total Total direct materials purchases First Second Third Fourth Quarter Quarter Quarter Quarter 18,048 $ 14,000 $ 14,800 $ 11,552$ First Second Third Fourth Quarter | Quarter Quarter Quarter 58,400 Total $ 14,000 0,829 1 $ Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 1st Qtr.-Qtr. 1 direct material purchases paid in Qtr. 1 1st Qtr. Qtr. 1 direct material purchases paid in Qtr. 2 2nd Qtr. -Qtr. 2 direct material purchases paid in Qtr. 2 2nd Qtr. -Qtr. 2 direct material purchases paid in Qtr. 3 3rd Qtr.Qtr. 3 direct material purchases paid in Qtr. 3 3rd Qtr.-Qtr. 3 direct material purchases paid in Qtr. 4 4th Qtr.Qtr. 4 direct material purchases paid in Qtr. 4 7,219 8,400 $ 5,600 8,880 $ 5,920 6,931 12,851 $ 24,829 15,619 14,480 Total payments for direct materials 67,779 Direct Labor: Total payments for direct labor 5,888 5,504 5,824 6.144 23,360 Manufacturing Overhead: Variable manufacturing overhead Utilities insurance property taxes 5,520 255251 5,160 25525 5,460 255251 5,760|| 255251 21,900 102 100 Manufacturing Overhead: Variable manufacturing overhead 21,900 Utilities, insurance, property taxes Total payments for manufacturing overhead 5,520 25,525 31,045 5,160 25,525 30,685 5,460 25,525 30,985 5,760 25,525 31,285 102,100 124,000 Selling and Administrative Expenses: 11,000 44,000 20,400 Salaries Expense Rent Expense Insurance Expense Supplies Expense Total payments for Selling and Admin. expenses 11,000 5,100 900 3,360 20,360 5,100 900 3,570 11,000 5,100 900 3,780 20,780 11,000 5,100 900 3,990 20,990 3,600 14,700 20,570 82,700 Income Taxes: Total payments for income taxes 4,000 4,000 4,000 4,000 16,000 Capital Expenditures: Total payments for capital expenditures 20,000 20,000 $ 106,122 $ 76,378 $ 76,069 $ 75,270 $ 333,839 Total cash payments (before interest) Accounts Payable balance, December 31, 2019: 4th Qtr. Qtr. 4 direct material purchases paid in Qtr. 1 of 2020 4.621 Cash Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter 55,000||$ 62,358 $ 103,510||$ 113,480 117,530 124,530 168,480 179,888 228,040|| Fourth Quarter Total 151,971||$ 131,530 55,000 487,070 283,501 542,070 Beginning cash balance Cash receipts Cash available Cash payments: Capital expenditures Purchases of direct materials Direct labor Manufacturing overhead Selling and administrative expenses 20,000 24,829 5,888 31,045 20,360 4,000 15,619 5,504 30,685 20,570 4,000 14,480 5,824 30,985 20,780 4,000 12,851 6,144 31,285 20,990 4,000 20,000 67,779 23,360 124,000 82,700 16,000 Income taxes Interest expense 106,122 76,378 75,270 333,839 Total cash payments Ending cash balance before financing 62,358 (50,000) 103,510 (50,000) 76,069 151,971 (50,000) 208,231 (50,000) 208,231 (50,000) 12,358 53,510 101,971 158,231 158,231 Minimum cash balance desired Projected cash excess (de ciency) Financing Borrowing Principal repayments Total effects of financing Ending cash balance 62,358||$ 103,510 $ 151,971 $ 208,231| 208,231 Gessing Tire Company Budgeted Income Statement For the Year Ended December 31, 2019 Sales Revenue $ 490,000 Cost of Goods Sold 217,780 Gross Profit 272,220 Selling and Administrative Expenses 90,700 Operating Income 181,520 Interest Expense Income before Income Taxes 181,520 Income Tax Expense 16,000 165,520 Net Income Gessing Tire Company Budgeted Balance Sheet December 31, 2019 Assets Current Assets: Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation Total Assets Liabilities Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 0 Reference Gessing Tire Company Production Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter Fourth Quarter Total Budgeted tires to be sold Plus: Desired tires in ending inventory Total tires needed 1,600 340 1,700 360 1,800 380 1,900 400 7,000 400 2,300 1,940 100 2,060 340 2,180 360 7,400 100 Less: Tires in beginning inventory 1,840 820 1.920 7,300 Budgeted tires to be produced Gessing Tire Company Direct Materials Budget For the Year Ended December 31, 2019 First Second Quarter Quarter Third Quarter Fourth Quarter Total Budgeted tires to be produced 1,840 1,720 1,820 1,920 7,300 3,640 3,840 Direct materials per tire Direct materials needed for production Plus: Desired direct materials in ending inventory Total direct materials needed 3,680 1,032 3,440 1,092 1.152 14,600 200 200 4,712 14,800 4,532 1,032 4,792 1,092 4,040 1,152 200 Less: Direct materials in beginning inventory Budgeted purchases of direct materials 3,700 14,600 4.00 Direct materials cost per pound 3,500 4.00 $ 14,000 $ 4.00 $ 4.00 14,800 18,048 $ Budgeted cost of direct materials 58,400 Total Gessing Tire Company Selling and Administrative Expense Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Quarter Salaries Expense 11,000S 11,000S 11,000 $ 11,000 Rent Expense 5,100 5,100 5,100 5,100 Insurance Expense 900 Depreciation Expense 2,000 2,000 2,000 2,000 Supplies Expense 3,360 3,570 3,780 3,990 S 22,360 S Total budgeted selling and administrative expense 22,570 $ 22,780 $ 22.990s 900 900 900 44,000 20,400 3,600 8,000 14,700 90 700 Cash Receipts from Customers Total Total sales First Second Third Fourth Quarter Quarter Quarter Quarter $ 112,000||$ 119,000||$ 126,000$ 133,000 S First Second Third Fourth Quarter Quarter Quarter Quarter 490,000 Total 25,000 33,600 54,880 $ Cash Receipts from Customers: Accounts Receivable balance, December 31, 2018 1st Qtr.Cash sales 1st Qtr.-Credit sales, collection of Qtr. 1 sales in Qtr. 1 1st Qtr.Credit sales, collection of Qtr. 1 sales in Qtr. 2 2nd Qtr.Cash sales 2nd Qtr.-Credit sales, collection of Qtr. 2 sales in Qtr. 2 2nd Qtr.-Credit sales, collection of Qtr. 2 sales in Qtr. 3 3rd Qtr.Cash sales 3rd Qtr.-Credit sales, collection of Qtr. 3 sales in Qtr. 3 3rd Qtr.Credit sales, collection of Qtr. 3 sales in Qtr. 4 4th Qtr.Cash sales 4th Qtr.-Credit sales, collection of Qtr. 4 sales in Qtr. 4 23,520 35,700 58,310 $ 24,990 37,800 61,740 $ 26,460 39,900 65,170 131,530 $ $ Total cash receipts from customers 113,480 $ 117,530 $ 124,530 $ 487,070 Accounts Receivable balance, December 31, 2019: 4th Qtr.Credit sales, collection of Qtr. 4 sales in Qtr. 1 of 2020 $ 27,930 Cash Payments Total Total direct materials purchases First Second Third Fourth Quarter Quarter Quarter Quarter 18,048 $ 14,000 $ 14,800 $ 11,552$ First Second Third Fourth Quarter | Quarter Quarter Quarter 58,400 Total $ 14,000 0,829 1 $ Cash Payments Direct Materials: Accounts Payable balance, December 31, 2018 1st Qtr.-Qtr. 1 direct material purchases paid in Qtr. 1 1st Qtr. Qtr. 1 direct material purchases paid in Qtr. 2 2nd Qtr. -Qtr. 2 direct material purchases paid in Qtr. 2 2nd Qtr. -Qtr. 2 direct material purchases paid in Qtr. 3 3rd Qtr.Qtr. 3 direct material purchases paid in Qtr. 3 3rd Qtr.-Qtr. 3 direct material purchases paid in Qtr. 4 4th Qtr.Qtr. 4 direct material purchases paid in Qtr. 4 7,219 8,400 $ 5,600 8,880 $ 5,920 6,931 12,851 $ 24,829 15,619 14,480 Total payments for direct materials 67,779 Direct Labor: Total payments for direct labor 5,888 5,504 5,824 6.144 23,360 Manufacturing Overhead: Variable manufacturing overhead Utilities insurance property taxes 5,520 255251 5,160 25525 5,460 255251 5,760|| 255251 21,900 102 100 Manufacturing Overhead: Variable manufacturing overhead 21,900 Utilities, insurance, property taxes Total payments for manufacturing overhead 5,520 25,525 31,045 5,160 25,525 30,685 5,460 25,525 30,985 5,760 25,525 31,285 102,100 124,000 Selling and Administrative Expenses: 11,000 44,000 20,400 Salaries Expense Rent Expense Insurance Expense Supplies Expense Total payments for Selling and Admin. expenses 11,000 5,100 900 3,360 20,360 5,100 900 3,570 11,000 5,100 900 3,780 20,780 11,000 5,100 900 3,990 20,990 3,600 14,700 20,570 82,700 Income Taxes: Total payments for income taxes 4,000 4,000 4,000 4,000 16,000 Capital Expenditures: Total payments for capital expenditures 20,000 20,000 $ 106,122 $ 76,378 $ 76,069 $ 75,270 $ 333,839 Total cash payments (before interest) Accounts Payable balance, December 31, 2019: 4th Qtr. Qtr. 4 direct material purchases paid in Qtr. 1 of 2020 4.621 Cash Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter 55,000||$ 62,358 $ 103,510||$ 113,480 117,530 124,530 168,480 179,888 228,040|| Fourth Quarter Total 151,971||$ 131,530 55,000 487,070 283,501 542,070 Beginning cash balance Cash receipts Cash available Cash payments: Capital expenditures Purchases of direct materials Direct labor Manufacturing overhead Selling and administrative expenses 20,000 24,829 5,888 31,045 20,360 4,000 15,619 5,504 30,685 20,570 4,000 14,480 5,824 30,985 20,780 4,000 12,851 6,144 31,285 20,990 4,000 20,000 67,779 23,360 124,000 82,700 16,000 Income taxes Interest expense 106,122 76,378 75,270 333,839 Total cash payments Ending cash balance before financing 62,358 (50,000) 103,510 (50,000) 76,069 151,971 (50,000) 208,231 (50,000) 208,231 (50,000) 12,358 53,510 101,971 158,231 158,231 Minimum cash balance desired Projected cash excess (de ciency) Financing Borrowing Principal repayments Total effects of financing Ending cash balance 62,358||$ 103,510 $ 151,971 $ 208,231| 208,231 Gessing Tire Company Budgeted Income Statement For the Year Ended December 31, 2019 Sales Revenue $ 490,000 Cost of Goods Sold 217,780 Gross Profit 272,220 Selling and Administrative Expenses 90,700 Operating Income 181,520 Interest Expense Income before Income Taxes 181,520 Income Tax Expense 16,000 165,520 Net Income