Part D

Problem 23-6A (Part Level Submission) Krause Industries' balance sheet at December 31, 2016, is presented below KRAUSE INDUSTRIES Balance Sheet December 31, 2016 Assets Current Assets Cash Accounts receivable Finished goods inventory (1,500 units) $7,500 73,500 25,460 106,460 Total current assets Property, Plant, and Equipment $40,580 Equipment Less: Accumulated depreciation 10,230 30,350 $136,810 Total assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable $27,580 45,500 73,080 Total liabilities Stockholders' Equity Common stock Retained earnings $36,240 27,490 Total stockholders' equity 63,730 $136,810 Total liabilities and stockholders' equity Budgeted data for the year 2017 include the following. 2017 uarter 4 Total Sales budget (8,000 units at $32) Direct materials used Direct labor Manufacturing overhead applied Selling and administrative expenses $76,800 $256,000 62,500 50,900 48,800 75,000 12,010 12,500 10,000 17,040 To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2017, 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 40% of income before income taxes. In 2017, the company expects to declare and pay an $9,620 cash dividend