GRILTON TIRE COMPANY Balance Sheet December 31, 2021 Assets Current Assets: Cash $ 39,000 Accounts Receivable 40,000 Raw Materials Inventory 2,400 Finished Goods Inventory 8,700 Total Current Assets $ 90,100 Property, Plant and Equipment:

Equipment 177,000 Less: Accumulated Depreciation (42,000) 135,000 Total Assets $225,100 Liabilities Current Liabilities: Accounts Payable $ 8,000 Stockholders Equity Common Stock, no par $ 130,000 Retained Earnings 87,100 Total Stockholders Equity 217,100 Total Liabilities and Stockholders Equity $225,100 Other data for Grilton Tire Company: a. Budgeted Sales are 1,500 for the first quarter and expected to increase by 200 tires per quarter. Cash Sales are expected to be 30% of total sales, with the remaining 70% of sales on account. b. Finished Goods Inventory on December 31, 2021 consists of 300 tires at $29 each. c. Desired ending Finished Goods Inventory is 40% of the next quarters sales; first quarter sales for 2023 are expected to be 2,300 tires and second quarter sales for 2022 are expected to be 2,500. FIFO inventory costing method is used. d. Direct Materials cost is $8 per tire. e. Desired ending Raw Materials Inventory is 30% of the next quarters direct materials needed for production. f. Each tire requires 0.40 hours of direct labor; direct labor costs average $16 per hour. g. Variable manufacturing overhead is $2 per tire produced. h. Fixed manufacturing overhead includes $4,500 per quarter in depreciation and $26,780 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $8,000 per quarter for salaries; $1,800 per quarter for rent; $1,200 per quarter for insurance; and $500 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 2% of sales.

k. Capital expenditures include $45,000 for new manufacturing equipment, to be purchased and paid in the first quarter. l. Cash receipts for sales on account are 60% in the quarter of sale and 40% in the quarter following the sale. The December 31, 2021 Accounts Receivable ($40,000) is received in the first quarter of 202.2 m. Direct materials purchases are paid 70% in the quarter purchased and 30% in the following quarter. The December 31, 2021 Accounts Payable ($8,000) is paid in the first quarter of 2022. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. p. Grilton desires to maintain a minimum cash balance of $35,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Interest must be paid at the beginning of each quarter.

PLEASE SHOW HOW YOU GET THE TOTAL UNITS PRODUCED IN THE COST OF GOODS MANUFACTURED/TOTAL UNITED PRODUCED FORMULA

A Sales 5 5 Cost of Goods Sold: 7 Fin. Goods Inv. Dec. 31,2021* 3 o Cost of Goods Manufactured 1 2 Goods available for sale 3 4 Less. Fin. Goods Inv. 12/31/2022** 5 6 Cost of Goods Sold 7 8 9 Gross Margin 0 1 Selling and Admin. Expenses 2 3 Income from Operations 4 5 Interest Expense 6 7 Income before Income taxes 8 9 Income Tax Expense 1 Net Income 2 3 **Cost of Goods Manufactured/ 4 Total units produced = Unit cost for 5 units produced in 2022 1 2 3 06.000 INCOME STATEMENT For the year ended December 31, 2022 $ 360,000 8,700 EA $ $ $ 253,368 262,068 53200 660 14000