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 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: PANTHER CORPORATION Expected Account Balances for December 31, Year 2 5,100 323,000 200,000 535,000 Cash Accounts receivable Inventory (January 1, Year 2) Plant and equipment ccumulated depreciation Accounts payable Notes payable (due within one year) Accrued payables Common stock Retained earnings Sales revenue Other income Manufacturing costs S 167,000 183,000 203,000 96,000 310,000 541,600 2,430,000 42,000 Materials Direct labor Variable overhead Depreciation Other fixed overhead 900,000 950,000 523,000 23,000 34,000 Marketing 86,000 67,000 186,000 Commissions Salaries Promotion and advertising Administrative Salaries Travel Office costs Income taxes 67,000 11,500 39,000 23,000 Dividends $ 3,972,600 $3,972,600 Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 450,000 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 PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Revenues Sales revenue $ 1,930,000 66,000 $1,996,000 Other income Cost of goods sold Direct labor Fixed overhead Beginning inventory Ending inventory Expenses Materials $ 570,000 582,000 347,000 51,000 $ 1,550,000 200,000 $ 1,750,000 Variable overhead 200,000 $ 1,550,000 Selling Salaries Commissions Promotion and advertising $ 57,000 63,000 129,000 249,000 General and administrative $ 64,000 8,000 35,000 Salaries Travel Office costs 107,000 36.000 1.942,00 Income taxes Operating profit Beginning retained earnings 54,000 510,600 $ 564,600 23,000 $ 541,600 Subtotal Less dividends Ending retained earnings 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 Other income Total Revenue Expenses Cost of goods manufactured & sold Materials Direct labor Variable overhead Fixed overhead Beginning inventory Ending inventory Marketing Salaries Commissions Promotions and advertising Administrative Salaries Travel Office costs Income taxes (credit) Total expenses Operating profit (loss) 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
