Only need answers with explanations for questions 1 and 2 to check my work
ACCOUNTING 210 SPECIAL ASSIGNMENT BUDGETING PROBLEM The Boulder Corporation balance sheet at 12/31/15 is expected to be: BALANCE SHEET Cash $ 14,200 Accounts Receivable 21,600 Accounts Payable Materials 15,840 Note Payable 10% Finished Goods 27,000 Taxes Payable Equipment 45,000 Common Stock Accumulated Depreciation (5.000) Retained Earnings S118,640 $ 8,370 25,000 13,000 25,000 47.220 S118,640 Boulder is preparing their budgets for the first quarter of 2016, and has gathered the following information: A. Boulder produced one product. In 2015 they expect to sell 12.000 units at a selling price of $40 per unit. For 2016, they will raise the selling price 10% and expect to increase unit sales by 20%. Sales occur 30% in the first quarter, 20% in the second quarter, and 25% in each of the last 2 quarters. Sales are 70% cash and 30% credit, B. The 12/31/15 finished goods inventory will consist of 1,080 units at a cost of $25 per unit. Boulder desires an ending finished goods inventory equal to 25% of the next quarter's unit sales. C. The 12/31/15 materials inventory will consist of 3.168 pounds at a cost of $5 per pound. Each finished goods unit requires 2 pounds of materials. Boulder desires an ending materials inventory equal to 40% of the next quarter's production needs. D. Direct labor (paid as incurred) is 3/4 hour per unit of finished goods. The direct labor rate is $12 an hour. E. Factory overhead consists of depreciation on equipment and other overhead costs paid in cash. In the first quarter, depreciation will be $2,000 and other overhead costs are expected to total $21,760. Assume all overhead is fixed. F. Selling and administrative expenses are $19,000 per quarter plus 54 per unit sold. These expenses are paid in the quarter incurred. G. Sales are 70% cash and 30% credit. Of the credit sales, 40% are collected in the quarter of sale and 60% in the following quarter. All of the 12/31/15 accounts receivable are expected to be collected in the first quarter of 2016, H. All purchases of materials are on account. 70% of these purchases are paid for in the quarter of purchase and 30% in the following quarter. All 12/31/15 accounts payable will be paid in the first quarter of 2016. 1. The note payable is due at the end of 2016; interest is paid at the end of each quarter. J. Boulder will purchase $2,000 of equipment in February, K. Boulder's tax rate is 30%. 12/31/15 taxes payable will be paid in the first quarter of 2016. The taxes due for the first quarter of 2016 will be paid in May of 2016. L. Boulder expects to pay 40% of their budgeted net income in dividends. These dividends will be declared on February 14 and paid on March 1. M. There is no beginning or ending work-in-process. N. A minimum cash balance of $12.000 is to be maintained REQUIRED (All budgets (excepti's 1 and 2) are for the first quarter only: Prepare schedules (by quarter, not month) for 1. Sales budget (all four quarters) 6. Selling and administrative expense budget 2. Production budget (first two quarters). 7. Budgeted income statement, 3. Direct materials budget. 8. Cash budget with supporting schedules 4. Direct labor budget. 9. Budgeted balance sheet. 5. Manufacturing overhead budget
