Panther Corporation appeared to be experiencing a good year. Sales in the first quarter were one-third ahead of last year, and the sales department predicted that this rate would continue throughout the entire year. The controller asked Janet Nomura, a summer accounting intern, to prepare a draft forecast for the year and to analyze the differences from last year's results. She based the forecast on actual results obtained in the first quarter plus the expected costs of production to be completed in the remainder of the year. She worked with various department heads (production, sales, and so on) to get the necessary information. The results of these efforts follow: $ 170,000 186.000 206,000 99,000 340,000 699,400 2,460,000 48,000 PANTHER CORPORATION Expected Account Balances for December 31, Year 2 Cash 5,400 Accounts receivable 326,000 Inventory (January 1, Year 2) 200,000 Plant and equipment 550.000 Accumulated depreciation Accounts payable Notes payable (due within one year) Accrued payables Common stock Retained earnings Sales revenue Other income Manufacturing costs Materials 941,000 Direct labor 973,000 Variable overhead 645.000 Depreciation 26.000 Other fixed overhead 37,000 Marketing Commissions 92.000 Salaries 70,000 Promotion and advertising 192,000 Administrative Salaries 70,000 Travel 13,000 Office costs 42.000 Income taxes Dividends 26,000 $ 4,208,400 $4,208,400 Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 460,000 units, and planned sales volume is 410,000 units. Sales and production volume was 310,000 units last year. The company uses a full-absorption costing and FIFO inventory system and is subject to a 40 percent income tax rate. The actual income statement for last year follows: $2,017,000 PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Revenues Sales revenue $ 1,950,000 Other income 67,000 Expenses Cost of goods sold Materials $ 552,000 Direct labor 600,000 Variable overhead 344,000 Fixed overhead 54,000 $ 1,550,000 Beginning inventory 200,000 $ 1.750,000 Ending inventory 200,000 $1,550,000 Selling Salaries $ 60,000 Commissions 66,000 Promotion and advertising 132,000 258,000 General and administrative Salaries 62,000 Travel 11,500 Office costs 111,500 Income taxes 39,000 Operating profit Beginning retained earnings Subtotal Less dividends Ending retained earnings 38,000 1,958,500 58,500 666,900 $ 725,400 26,000 $ 699,400 Required: Prepared a budgeted income statement and balance sheet. (Round "Cost per unit" to 2 decimal places. Do not round any other intermediate calculations.) PANTHER CORPORATION Budgeted Income Statement For the Year Ended December 31, Year 2 Revenue: Sales revenue 2,460,000 48,000 Other income 2,508,000 Total Revenue Expenses: Cost of goods manufactured & sold: Materials Direct labor Variable overhead Fixed overhead 941,000 973,000 645,000 37,000 Beginning inventory 2,596,000 200,000 2,796,000 Ending inventory Marketing: Salaries Commissions Promotions and advertising Administrative: Salaries Travel Office costs Income taxes (credit) Total expenses Operating profit (loss) 2,508,000 (Enter all the values as positive values.) PANTHER CORPORATION Budgeted Balance Sheet Budgeted December 31, Year 2 Current Assets Total current assets $ Total assets Current liabilities $ Total current liabilities Shareholders' equity Total shareholders' equity Total liabilities and shareholders' equity
