Managerial Accounting

After your first year of operations, you decide that you need to prepare a budget for year 2 Rather than produce the product yourself, you have decided to outsource the production. You will purchase the completed product from the new manufacturer and sell the product. Assume the following information and assumptions to help you prepare your budget 1. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances Debits Credits Cash Accounts receivable Inventory Buildings and equipment (net) 48,000 224,000 60,000 370,000 Accounts payable Common Stock Retained earnings Totals 93,000 500,000 109,000 702,000 702,000 2. Actual sales for December and budgeted sales for the next four months are as follows December (actua $280,000 January February March April $400,000 $600,000 $300,000 $200,000 Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. a