More Info C. (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,300 tires for the first quarter and expected to increase by 250 tires per quarter. Cash 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 500 tires at $36 each. Desired ending Finished Goods Inventory is 40% of the next quarter's sales; first quarter sales for 2020 are expected be 2,300 tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 1,000 pounds of rubber compound used to manufacture the tires. e. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $4.00 per pound. f. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 1,000 pounds; indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor; direct labor costs average $20 per hour. h. Variable manufacturing overhead is $1 per tire. i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $32,600 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $2,400 per quarter for rent; $1,350 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. The Grady Tire Company manufactures racing tires for bicycles. Grady sells tires for $80 each. Grady is planning for the next year by developing a master budget by quarters. Grady's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) Other data for Grady Tire Company: (Click the icon to view the other data.) Read the requirements. Requirement 1. Prepare Grady's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. Begin by preparing the sales budget. Grady Tire Company Sales Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter Fourth Quarter Total Budgeted tires to be sold Sales price per unit Total sales P22-41A (similar to) Question Help 0 The Grady Tire Company manufactures racing tires for bicycles. Grady sells tires for $80 each. Grady is planning for the next year by developing a master budget by quarters. Grady's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) Other data for Grady Tire Company: (Click the icon to view the other data.) Read the requirements. Requirements Requirement 1. Prepare Grady's op direct materials budget, direct laborb receipts, schedule of cash payments dollar. sales budget, production budget, expense budget, schedule cash ound all calculations to the nearest Begin by preparing the sales budget. 1. Prepare Grady's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. 2. Prepare Grady's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Fort FI Qud Budgeted tires to be sold Sales price per unit Print Done Total sales Enter any number in the edit fields and then click Check Answer. ? 18 parts Clear All Check Answer remaining Question Help 0 production budget, et, schedule of cash ations to the nearest 22-41A (similertal ne Grady Tire Compa More Info r $80 each. Grady is quarters. Grady's ba E: (Click the icon to v insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor; direct labor costs average $20 per hour. equirement 1. Prepa h. Variable manufacturing overhead is $1 per tire. rect materials budget i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $32,600 per quarter for ceipts, schedule of cl other costs, such as utilities, insurance, and property taxes. ollar. j. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $2,400 per quarter for egin by preparing the rent: $1,350 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. I. Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019, uncollectible accounts are considered insignificant and not considered for budgeting purposes. n. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter; December 31, 2018, Accounts Payable is paid in the first quarter of 2019. udgeted tires to be s o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. ales price per unit q. Grady desires to maintain a minimum cash balance of $70,000 and borrows from the local bank as otal sales 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 8% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. ter any number in tl Print Done parts remaining Answer Score: 0 of 100 pts 1 of 1 (0 complete) HW Score: 0%, 0 of 100 pt P22-41A (similprtal Question Help . More Info The Grady Tire Compa for $80 each. Grady is by quarters. Grady's b (Click the icon to v Requirement 1. Prepa direct materials budget receipts, schedule of c dollar. production budget, et, schedule of cash ations to the nearest Begin by preparing the insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor, direct labor costs average $20 per hour. h. Variable manufacturing overhead is $1 per tire. i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $32,600 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $2,400 per quarter for rent; $1,350 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. 1. Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes. n. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter; December 31, 2018, Accounts Payable is paid in the first quarter of 2019. o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. q. Grady desires to maintain minimum cash balance of $70,000 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 8% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Budgeted tires to be s Sales price per unit Total sales Enter any number in t Print Done 18 parts Answer remaining Data Table - Grady Tire Company Balance Sheet December 31, 2018 Assets Current Assets: Cash $ 71,000 Accounts Receivable 50,000 Raw Materials Inventory 4,000 18,000 Finished Goods Inventory Total Current Assets $ 143,000 Property, Plant, and Equipment: Equipment 139,000 (55,000) Less: Accumulated Depreciation 84,000 $ 227,000 Total Assets Liabilities Liabilities Current Liabilities: Accounts Payable $ 11,000 Stockholders' Equity $ Common Stock, no par 140,000 76,000 Retained Earnings Total Stockholders' Equity 216,000 $ 227,000 Total Liabilities and Stockholders' Equity More Info C. (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,300 tires for the first quarter and expected to increase by 250 tires per quarter. Cash 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 500 tires at $36 each. Desired ending Finished Goods Inventory is 40% of the next quarter's sales; first quarter sales for 2020 are expected be 2,300 tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 1,000 pounds of rubber compound used to manufacture the tires. e. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $4.00 per pound. f. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 1,000 pounds; indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor; direct labor costs average $20 per hour. h. Variable manufacturing overhead is $1 per tire. i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $32,600 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $2,400 per quarter for rent; $1,350 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. The Grady Tire Company manufactures racing tires for bicycles. Grady sells tires for $80 each. Grady is planning for the next year by developing a master budget by quarters. Grady's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) Other data for Grady Tire Company: (Click the icon to view the other data.) Read the requirements. Requirement 1. Prepare Grady's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. Begin by preparing the sales budget. Grady Tire Company Sales Budget For the Year Ended December 31, 2019 First Second Third Quarter Quarter Quarter Fourth Quarter Total Budgeted tires to be sold Sales price per unit Total sales P22-41A (similar to) Question Help 0 The Grady Tire Company manufactures racing tires for bicycles. Grady sells tires for $80 each. Grady is planning for the next year by developing a master budget by quarters. Grady's balance sheet for December 31, 2018, follows: (Click the icon to view the balance sheet.) Other data for Grady Tire Company: (Click the icon to view the other data.) Read the requirements. Requirements Requirement 1. Prepare Grady's op direct materials budget, direct laborb receipts, schedule of cash payments dollar. sales budget, production budget, expense budget, schedule cash ound all calculations to the nearest Begin by preparing the sales budget. 1. Prepare Grady's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. 2. Prepare Grady's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Fort FI Qud Budgeted tires to be sold Sales price per unit Print Done Total sales Enter any number in the edit fields and then click Check Answer. ? 18 parts Clear All Check Answer remaining Question Help 0 production budget, et, schedule of cash ations to the nearest 22-41A (similertal ne Grady Tire Compa More Info r $80 each. Grady is quarters. Grady's ba E: (Click the icon to v insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor; direct labor costs average $20 per hour. equirement 1. Prepa h. Variable manufacturing overhead is $1 per tire. rect materials budget i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $32,600 per quarter for ceipts, schedule of cl other costs, such as utilities, insurance, and property taxes. ollar. j. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $2,400 per quarter for egin by preparing the rent: $1,350 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. I. Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019, uncollectible accounts are considered insignificant and not considered for budgeting purposes. n. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter; December 31, 2018, Accounts Payable is paid in the first quarter of 2019. udgeted tires to be s o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. ales price per unit q. Grady desires to maintain a minimum cash balance of $70,000 and borrows from the local bank as otal sales 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 8% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. ter any number in tl Print Done parts remaining Answer Score: 0 of 100 pts 1 of 1 (0 complete) HW Score: 0%, 0 of 100 pt P22-41A (similprtal Question Help . More Info The Grady Tire Compa for $80 each. Grady is by quarters. Grady's b (Click the icon to v Requirement 1. Prepa direct materials budget receipts, schedule of c dollar. production budget, et, schedule of cash ations to the nearest Begin by preparing the insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor, direct labor costs average $20 per hour. h. Variable manufacturing overhead is $1 per tire. i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $32,600 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $2,400 per quarter for rent; $1,350 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. 1. Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes. n. Direct materials purchases are paid 50% in the quarter purchased and 50% in the following quarter; December 31, 2018, Accounts Payable is paid in the first quarter of 2019. o. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. q. Grady desires to maintain minimum cash balance of $70,000 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 8% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Budgeted tires to be s Sales price per unit Total sales Enter any number in t Print Done 18 parts Answer remaining Data Table - Grady Tire Company Balance Sheet December 31, 2018 Assets Current Assets: Cash $ 71,000 Accounts Receivable 50,000 Raw Materials Inventory 4,000 18,000 Finished Goods Inventory Total Current Assets $ 143,000 Property, Plant, and Equipment: Equipment 139,000 (55,000) Less: Accumulated Depreciation 84,000 $ 227,000 Total Assets Liabilities Liabilities Current Liabilities: Accounts Payable $ 11,000 Stockholders' Equity $ Common Stock, no par 140,000 76,000 Retained Earnings Total Stockholders' Equity 216,000 $ 227,000 Total Liabilities and Stockholders' Equity