P$22\mathrm{.}6($LO $3,4),$ AP Krause Industries' balance sheet at December $31,2021,$ is presented here.

Prepare budgeted cost of

income statement, retal

and balance sheet.

Liabilities and Stockholders' Equity ${?}_{(})$

Liabilities

$ $25,000$

Notes payable

Accounts payable

$\frac{45,000}{70,000}$

Total liabilities

Stockholders' equity

Common stock

Retained earnings

$65,000$

Total stockholders' equity

Total liabilities and stockholders' equity Budgeted data for the year $2022$ include the following.

To meet sales requirements and to have $2,500$ units of finished goods on hand at December $31,$

$2022,$ the production budget shows $9,000$ required units of output. The total unit cost of production is

expected to be $$18.$ Krause uses the first$-$in$,$ first$-$out $($FIFO$)$ inventory costing method. Interest expense

is expected to be $$3,500$ for the year. Income taxes are expected to be $20\%$ of income before income

taxes. In $2022,$ the company expects to declare and pay an $$8,000$ cash dividend.

The company's cash budget shows an expected cash balance of $$13,180$ at December $31,2022.$ All

sales and purchases are on account. It is expected that $60\%$ of quarterly sales are collected in cash within

the quarter and the remainder is collected in the following quarter. Direct materials purchased from sup$-$

pliers are paid $50$ in the guarter incurred and the remainder in the following quarter. Purchases in the

fourth quarter were the same as the materials used. In $2022,$ the company expects to purchase additional

equipment costing $$9,000.$ A total of $$4,000$ of depreciation expense on equipment is included in the

budget data and split equally between manufacturing overhead and selling and administrative expenses.

Krause expects to pay $$8,000$ on the outstanding notes payable balance plus all interest due and payable

to December $31($included in interest expense $$3,500,$ above$).$ Accounts payable at December $31,2022,$

includes amounts due suppliers $($see above$)$ plus other accounts payable relating to manufacturing over$-$

head of $$7,200.$ Unpaid income taxes at December $31$ will be $$5,000.$

Prepare a budgeted statement of cost of goads sold, budgeted multiple$-$step income statement, and

Instructions

retained earnings statement for $2022,$ and a budgeted classified balance sheet at December $31,2022.$

ontinuing Cases Proof of Budgeted Cash Balance, December $31,2022$