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I need help with the attached question please :). It is due on Sunday. Any and all help appreciated. Techlabs operates a computer training center.
I need help with the attached question please :). It is due on Sunday. Any and all help appreciated.
Techlabs operates a computer training center. The following data relate to the preparation of a master budget for January 2018. 1. At the end of 2017, the company's general ledger indicated the following balances DEBITS Cash Accounts receivable Equipment (net) 2. 3. 4. 5. 6. 7. 8. $60,000 40,000 120,000 CREDITS Accounts Payable Note payable Common stock Retained earnings $40,000 60,000 30,000 90,000 Total $220,000 $220,000 Tuition revenue in December 2017 was $80,000, and tuition revenue budgeted for January 2018 is $110,000 Fifty percent of tuition revenue is collected in the month earned, and 50 percent is collected in the subsequent month. The receivable balance at the end of the 2017 reflects tuition earned in December 2017. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $60,000; rent, $4,000; depreciation on equipment, $8,000; utilities, $2,000; other, $800. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $40,000 payable at the end of 2017 represents money owed for the purchase of computer equipment in December 2017. The company intends to purchase $50,000 of computer equipment in January 2018. The anticipated $8,000 per month of depreciation (see number 4) reflects the addition of $2,000 of monthly depreciation related to this purchase. The note is at 15 percent per annum and requires monthly interest payments of $750. The payments are made on the 20th of each month. The principal must be paid in February 2019. The tax rate is 35 percent. Complete the following budgets: A) Techlabs Cash Budget For January 2018 Cash receipts Collection of December 2017 tuition Collection of January 2018 tuition Total cash receipts Cash disbursements Payment of salaries Payment of rent $ Payment of utilities Payment of other expenses Payment for purchases of computer equipment Payment of interest on note Payment of taxes Total disbursements Excess disbursements over receipts Plus beginning cash balance Ending cash balance $ B) Techlabs Budget Income Statement For January 2016 Tuition revenue $ Less: Salaries Rent Utilities Depreciation Other Interest expenses Total expense Income before taxes Taxes on income Net income $ C) Techlabs Budgeted Balance Sheet As of January 31, 2018 Assets $ Cash Accounts receivable Equipment (net) Total assets $ Liabilities Accounts payable $ Note payable Total liability Stockholders' equity Common equity Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $Step by Step Solution
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