PLEASE ANSWER BOTH REQUIREMENTS. I WILL GIVE YOU A GOOD RATING. THANKS IN ADVANCE :)
Requirements:
1. Prepare Trevors cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. (round to the nearest dollar)
2. Prepare Trevor's annual budget for 2025, including budgeted income statement and budgeted balance sheet.
Balance Sheet:
More info
Trevor Toy Company Balance Sheet December 31, 2024 Assets Current Assets: Cash $ 15,000 40,000 600 5,000 Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation 60,600 199,000 (42,000) 157,000 Total Assets $ 217,600 Liabilities Current Liabilities: Accounts Payable $ 9,000 170,000 Stockholders' Equity Common Stock, no par $ Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 38,600 208,600 $ 217,600 (Unless otherwise noted, assume all of the following events occurred during 2024 and that any balances given are stated as of December 31, 2024.) a. Budgeted sales are 1,100 sets for the first quarter and expected to increase by 200 sets per quarter. Cash sales are expected to be 40% of total sales, with the remaining 60% of sales on account. Sets are budgeted to sell for $80 per set. b. Finished Goods Inventory on December 31, 2024, consists of 200 sets at $25 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2026 are expected to be 1,900 sets. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2024, consists of 600 pounds. Direct materials requirement is three pounds per set. The cost is $1 per pound. e. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2025, is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. f. Each set requires 0.20 hours of direct labor; direct labor costs average 8 per hour. g. Variable manufacturing overhead is $1.60 per set. h. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $2,276 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $13,000 per quarter for salaries; $2,400 per quarter for rent; $600 per quarter for insurance; and $500 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 2% of sales. k. Capital expenditures include $20,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. I. Cash receipts for sales on account are 60% in the quarter of the sale and 40% in the quarter following the sale; Accounts Receivable balance on December 31, 2024, is expected to be received in the first quarter of 2025; uncollectible accounts are considered insignificant and not considered for budgeting purposes. m. Direct materials purchases are paid 80% in the quarter purchased and 20% in the following quarter; Accounts Payable balance on December 31, 2024, is expected to be paid in the first quarter of 2025. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. Income tax expense is projected at $1,500 per quarter and is paid in the quarter incurred. p. Trevor desires to maintain a minimum cash balance of $40,000 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 8% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter
