Other data for Grady Tir Click the icon to vie Read the requirements. The Grady Tire Company manufactures racing tires for bicycles. Grady sells tires for $70 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.) ruwy wewny Production Budget For the Year Ended December 31, 2019 First Second Third Fourth Quarter Quarter Quarter Budgeted tires to be sold 1100 1350 1600 1850 Plus: Desired tires in ending inventory Total tires needed Less: Tires in beginning inventory Quarter Total 5900 Budgeted tires to be produced 1 of 1 (1 complete) 0 More Info ng ast t.) or the (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 1,100 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 300 tires at $27 each. c. Desired ending Finished Goods Inventory is 40% of the next quarter's sales; first quarter sales for 2020 are expected be 2,100 tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 600 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 $8.50 per pound. f. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.50 hours of direct labor; direct labor costs average $14 per hour. h. Variable manufacturing overhead is $3 per tire. Fixed manufacturing overhead includes $3.000 per quarter in depreciation and $22.760 per quarter for i. aber in Print Done Ps Dw 99+ O 1 of 1 (1 complete) - X More Info th i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $22,760 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $12,000 per quarter for salaries; $5,400 per quarter for rent; $1,200 per quarter for insurance; and $1,500 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. 1. Capital expenditures include $20,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 60% in the quarter of the sale and 40% 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 60% in the quarter purchased and 40% 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 $2,500 per quarter and is paid in the quarter incurred. 4. Grady desires to maintain a minimum cash balance of $50,000 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 er in Print Done Ps Dw o Re S 99+ 1 of 1 (1 complete) i More Info ng nast et.) or the for rent; $1,200 per quarter for insurance; and $1,500 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 3% of sales. 1. Capital expenditures include $20,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 60% in the quarter of the sale and 40% 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 60% in the quarter purchased and 40% 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 $2,500 per quarter and is paid in the quarter incurred. 4. Grady desires to maintain a minimum cash balance of $50,000 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 5% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter Der in Print Done o te Ps Dw 994 1 of 1 (1 complete) HWS 5. Gre jarter i Data Table on Bud Decer Sed Qul Grady Tire Company Balance Sheet December 31, 2018 Assets Current Assets: Cash $ Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant, and Equipment: Equipment 52,000 35,000 5,100 8,100 $ 100,200 206,000 elds and Print Done Te ? Ps DW o 994 1 of 1 (1 complete) - X Data Table bicycles. Gre get by quarter rioperty, rian, Anu Equipment Equipment Less: Accumulated Depreciation 206,000 (39,000) 167,000 uy oduction Bud Ended Dece: rst Sed $ 267,200 Total Assets Liabilities arter Qu 1100 10,000 Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par $ Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 130,000 127,200 257,200 S 267,200 input fields and Print Done Ps Dw o te 994