Homework: Chapter 22 Comprehensive Budgeting Probl 1 of 1 (1 con Score: 9.98 of 20 pts P22-41A (similar to) The Gridley Tire Company manufactures racing tires for bicycles. Gridley sells tires for $80 each. Gridley is planning for the next year by developing a master budget by quarters. Gridley's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) por Vrouw Review the sales budget you prepared above. Cash Receipts from Customers First Second Third Fourth Quarter Quarter Quarter Quarter Total 5128,000$ 144,000 $ 160,000 S 176,000 S 608,000 First Second Third Fourth Quarter Quarter Quarter Quarter Total Total sales 32.000 Cash Receipts from Customers: Accounts Roceivable balance. December 31, 2018 1st QtrCash sales 1st Qur-Credit sales, collection of our sales in Qir. 1 1st Or-Credit sales, collection of Otr. 1 sales in Ott 2 2nd Ott-Cash sales 2nd OtCredit sales, collection of ou 2 sales in Qt2 2nd Qur-Credit sales collection of our sales in O3 3rd Qtr-Cash sales 3rd QtrCredit sales, collection of tr. 3 sales in Qr: 3 3rd QtrCredit sales collection of 3 sales in Oir. 4 4.-Cash sales 4th Credit les collection of Ou 4 sales in Our 4 Total cash receipts from customers Enter any number in the edit fields and then click Check Answer Clear 10 parts remaining bicy i More Info 3. Grid Direct marenais requirements are 2 pounds or a rubber compound per tire. The cost or the compound is e. $7.00 per pound Desired ending Raw Materials Inventory is 20% of the next quarter's direct materials needed for production, desired ending inventory for December 31, 2019 is 400 pounds; indirect materials are f. insignificant and not considered for budgeting purposes. g. Each tire requires 0.70 hours of direct labor direct labor costs average $14 per hour. h. Variable manufacturing overhead is $1 per tire. Fixed manufacturing overhead includes $5,000 per quarter in depreciation and $68,100 per quarter for i. other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $9,500 per quarter for salaries: $1,800 per quarter for 1 rent: $1,350 per quarter for insurance; and $500 per quarter for depreciation, k Variable selling and administrative expenses include supplies at 1% of sales. Capital expenditures include $40,000 for new manufacturing equipment, to be purchased and paid in the I first quarter. Cash receipts for sales on account are 75% in the quarter of the sale and 25% in the quarter following the sale: December 31, 2018. Accounts Receivable is received in the first quarter of 2019, uncollectible m. accounts are considered insignificant and not considered for budgeting purposes. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter: n. December 31, 2018, Accounts Payable is paid in the first quarter of 2019. 0. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $2,000 per quarter and is paid in the quarter incurred. Gridley desires to maintain a minimum cash balance of $60,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarters principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000, interest is 10% per 9. year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter Print Done Kasp?homeworkdd591123438&questionid=1&flushed-true&cid=8418115¢erwinnyes omprehensive Budgeting Problem 1 of 1 (1 complete) Gridley olla tires for $80 each. Gridley is planning for y's balance sheet for December 31, 2018, follows: Other data for Gridley Tire Company, (Clok the icon to view the other data.) Read the resuirements: 38,000 2005 0,500 $ 9,500 $ 9,500 $ X Reference Gridley Tire Company Sales Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter 1,500 1.800 2.000 $ 80 5 80 $ 80$ $ 128.000 $144,000 $ 160,000 S Fourth Quarter Total Budgeted tires to be sold 7.600 2,200 80 $ Sales price per unit 80 Total sales 608,000 176,000 $ Print Done 32,000 Clear All 1 More Info (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) Budgeted sales are 1,600 tires for the first quarter and expected to increase by 200 tires per quarter. Cash a. sales are expected to be 40% of total sales, with the remaining 60% of sales on account b. Finished Goods Inventory on December 31, 2018 consists of 200 tires at $28 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are c. expected be 2.400 tires. FIFO inventory costing method is used Raw Materials Inventory on December 31, 2018, consists of 400 pounds of rubber compound used to d. manufacture the tires Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is e. $7.00 per pound. Desired ending Raw Materials Inventory is 20% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 400 pounds; indirect materials are insignificant and not considered for budgeting purposes. 9. Each tire requires 0.70 hours of direct labor, direct tabor costs average $14 per hour. h. Variable manufacturing overhead is S1 per tire Fixed manufacturing overhead includes 55,000 per quarter in depreciation and S68,100 per quarter for other costs, such as utilities, insurance, and property taxes Fixed selling and administrative expenses include $9,500 per quarter for salaries: $1,800 per quarter for rent: $1,350 per quarter for Insurance, and $500 per quarter for depreciation k Variable selling and administrative expenses include supplies at 1% of sales Capital expenditures include $40,000 for new manufacturing equipment to be purchased and paid in the I first quarter Cash receipts for sales on account are 75% in the quarter of the sale and 25% in the quarter following the sale: December 31, 2018. Accounts Receivable is received in the first quarter of 2019; uncollectible 1 Print Done 1 of 1 (1 complete) Data Table Gridley Tire Company Balance Sheet December 31, 2018 Assets Current Assets Cash $ 64,000 32,000 2,800 5,600 Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant, and Equipmenti Equipment $ 104,400 142,000 139.000) Less: Accumulated Depreciation 103,000 Total Assets 207 400 Liabilities Current Llabilities Accounts Payable 10,000 Stockholders' Equity Print Done 1 of 1 (1 complete) Data Table Cash $ 64,000 Accounts Receivable 32,000 2,800 5,600 $ Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation 104.400 142,000 (39,000) 103,000 Total Assets $ 207,400 Liabilities 10,000 Current Liabilities Accounts Payable $ Stockholders' Equity Common Stock, no par 180,000 Retained Earnings 37 400 Total Stockholders Equity 197 400 Total Liabilities and Stockholders Equity 207 400 Print Done