More Info - ve a (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 1.300 tires for the first quarter and expected to increase by 250 tires per quarter Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account b Finished Goods Inventory on December 31, 2018 consists of 600 tires at $32 each Desired ending Finished Goods Inventory is 20% of the next quarter's sales, first quarter sales for 2020 are expected be 2.300 tires. FIFO inventory costing method is used Raw Materials Inventory on December 31, 2018, consists of 1.200 pounds of rubber compound used d to manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is SS.00 per pound 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 1.200 pounds, indirect materials are insignificant and not considered for budgeting purposes Each tre requires 0 20 hours of direct labor direct labor costs average $$ per hour Variable manufacturing overhead is $2 per tire Fixed manufacturing overneed includes $2.500 per quarter in depreciation and $2.404 per quarter for other costs, such as utilities insurance and property taxes Fixed setting and administrative expenses indude $12.000 per quarter for salanes. $2 400 per quarter for en 5900 per quarter for insurance and $1800 per quarter for depreciation Variable selling and administrative expenses include supplies a 296 of sales De alter expenditunelindude 528.000 fat new manufacturing equipment to be purchased and paid in the first gwerter Tshire Diaries on daun 16 in the quarter of the sale and 2596 in the quarter following the sale December 2018 Ans Receivables received in the last quarter of 2019 9 More Info e ts ME f. g h 15 $UUU per pound 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 1.200 pounds; indirect materials are insignificant and not considered for budgeting purposes. Each tire requires 0 20 hours of direct labor; direct labor costs average 88 per hour. Variable manufacturing overhead is $2 per tire Fixed manufacturing overhead includes $3,500 per quarter in depreciation and S2,404 per quarter for other costs, such as utilities, insurance, and property taxes Fixed selling and administrative expenses include $13,000 per quarter for salaries: $2,400 per quarter for rent. $900 per quarter for insurance, and $1,500 per quarter for depreciation Variable selling and administrative expenses include supplies at 2% of sales Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in the first quarter cash receipts for sales on account are 75% in the quarter of the sale and 2696 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 Direc materials durchases are paid 70% in the quarter purchased and 30% in the following quarter, December 31, 2018 Accounts Payable is paid in the first quarter of 2019 bired labor manufacturing overhead, and selling and administrative costs are paid in the quarter Incurred Income tax expense is projected at 39.000 per quarter and is paid in the quarter incurred Gessing Desires to maintain a minimum 56 balance of $85.000 and borrows from the local bankas needed in increments of $1.000 at the beginning of the quarter principal paymats are made at the begiching of the quarter wed excess funds are avadable and in increments of $100D interest is 494 per year and aid at the beginning of the quarter based on the amount outstanding from the previous parter En - X 0 Requirements Tota 1. Prepare Gessing'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 Gessing's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Print Done Data Table - X sells tires for $80 each nber 31, 2018, fallows Gessing Tire Company 019 by quarter Requir payments, and cash Balance Sheet direct labor budget manu alculations to the nearest de December 31, 2018 Assets Current Assets Cash $ 88,000 Accounts Receivable 25.000 Fourth Raw Materials Inventory 9.000 Quarter Tot 19.200 Finished Goods Inventory $ 119.800 Total Current Assets Property. Plant, and Equipment Equipment 200.000 150.000) 166,000 Less. Accumulated Depreciation $ 275,800 Total Assets Liabilities Current Liabilities 13.000 Accounts Payable Stockholders' Equity The Gessing Tire Company manufactures racing tires for bicycles. Gessing sells tires for $80 each. Gessing is planning for the next year by developing a master budget by quarters. Gessing's balance sheet for December 31, 2018, follows: Click the icon to view the balance sheet) Data Table bn to men Gessing Tire Company pe DU Balance Sheet sales payme December 31, 2018 ea Assets Current Assets: Cash 66,000 Accounts Receivable 25.000 he st Raw Materials Inventory Finished Goods Inventory 9.600 19,200 it Total Current Assets 119,800 Property. Plant and Equipment: Equipment 206.000 (50.000) an Tess Accumulated enreriation 156.000 Print Done r to) - X any manufactu by developing i Data Table essing Tire bn to view Hnents w the balance Property. Plant, and Equipment: Equipment Gessing's op goods sold by ions to the nea 206,000 (50,000) sales budo bayments, 156,000 Less: Accumulated Depreciation $ 275,800 ales budget Total Assets Liabilities Current Liabilities: 13.000 For the First A Quart Accounts Payable $ Stockholders' Equity Common Stock, no par 110,000 Retained Earnings 152 800 Total Stockholders' Equity $ Total Liabilities and Stockholders Equity 262 800 275,800 ne edit flelds an Print Done 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.) Budgeted sales are 1,300 tires for the first quarter and expected to increase by 250 tires per quarter a Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account b. Finished Goods Inventory on December 31, 2018 consists of 600 tires at $32 each. Desired ending Finished Goods Inventory is 20% of the next quarter's sales, first quarter sales for 2020 C. are expected be 2,300 tires. FIFO inventory costing method is used Raw Materials Inventory on December 31, 2018, consists of 1.200 pounds of rubber compound used to d manufacture the tires Dir materials requirements are 2 pounds a rubber compound per tire. The cost of the compound is e $8.00 per pound Desired ending Raw Materials Inventory is 40% of the next quarters direct materials needed for production, desired ending inventory for December 31, 2019 is 1200 pounds indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0 20 hours of direct labor direct labor costs average $8 per houn h Variable manufacturing overhead is $2 per tire Fixed manufacturing overhead includes $3.500 per quarter in depreciation and $2.404 per quarter for other costs such as AS Insurance and ronity TAXAS n tel Brin Done More Info ww Fixed manufacturing overhead includes $3,500 per quarter in depreciation and $2.404 per quarter for i. other costs, such as utilities, insurance, and property taxes Fixed selling and administrative expenses include $13,000 per quarter for salaries; $2,400 per quarter i for rent; $900 per quarter for insurance, and $1,500 per quarter for depreciation k. Variable selling and administrative expenses include supplies at 2% of sales Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in 1 the 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 70% in the quarter purchased and 30% in the following quarter, n. December 31, 2018, Accounts Payable is paid in the first quarter of 2019. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter 0. incurred p. Income tax expense is projected at $3.000 per quarter and is paid in the quarter incurred Gessing desires to maintain a minimum cash balance of $65,000 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 4% Print Done an Te Bu D Fixed selling and administrative expenses include $13,000 per quarter for salaries; $2,400 per quarter i for rent: $900 per quarter for insurance, and $1,500 per quarter for depreciation k. Variable selling and administrative expenses include supplies at 2% of sales. Capital expenditures include $25,000 for new manufacturing equipment, to be purchased and paid in 1 the 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 70% in the quarter purchased and 30% in the following quarter, n. December 31, 2018, Accounts Payable is paid in the first quarter of 2019. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter o incurred p. Income tax expense is projected at $3,000 per quarter and is paid in the quarter incurred. Gessing desires to maintain a minimum cash balance of $65.000 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 4% per year and paid at the beginning of the quarter based on the amount outstanding from the previous q quarter. on ite SH Print Done i Requirements X ME 1. Prepare Gessing'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 Gessing's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Print Done